Phones priced at Rs 8,000 to Rs 15,000 cornered 51% of sales in July as against 34% a year ago and 45% in February, according to Counterpoint Technology Market Research.
Shares of low-end category phones – priced at Rs 5,000-Rs 8,000 and below Rs 5,000 – shrank to 19% and 1%, from 29% and 3% in February, and from 34% and 4% a year ago, respectively, due to lack of offerings and the preference of users for feature phones, analysts said.
The $100-$200 (Rs 7,350-Rs 14,700) category of smartphones in India has always been the biggest by volume but the exponential growth of budget and mid-range devices these days is primarily because of the economic impact and the emergence of new use-cases such as e-learning, which do not require high specifications, said Prachir Singh, a research analyst at Counterpoint.
Unit sales in the Rs 8,000-Rs 10,000 category surged 88% in July and in the Rs 10,000-Rs 15,000 segment they jumped 51% even as overall smartphone market sales fell 10% on-year for the month, he added. As per industry estimates, 11 million smartphones were sold in July and 12 million in August.
Singh said the trend continued in August and he expects the affordable category to expand its dominance for the rest of 2020. As a result, the average selling price of smartphones in India has fallen to $161 in April-June from $170 in January-March, according to market research company IDC. The average price may fall further as the year progresses, analysts said.
“Due to the pandemic, we are seeing an increasing need for a phone for children above six years – numbering close to 180 million – which is a completely blue ocean opportunity for everyone,” said Neil Shah, research director at Counterpoint.
To tap the demand, top companies Samsung, Xiaomi and Realme have flooded the market with cheaper phones. Even LG, Micromax, Gionee, iTel and Lava have seen strong demand for their low-priced devices, experts said.
As the smartphone market heads towards normalcy during the high-selling festive season, with September sales pegged at 15 million – at par with last year – analysts expect the affordable price band to continue dominating the market.
“The premium segment which was growing quite well last year will not see impressive sales with little clarity on the launch of Apple’s latest iPhone,” said independent analyst Madhumita Chaudhary. “As consumers push their upgrade cycles to early next year and cut back on discretionary spending, I expect the fourth quarter (October-December) to remain controlled by affordable smartphones, majorly from Xiaomi, Samsung and Realme.”
A Realme spokesperson told ET that its C series and Number series which cover the below-Rs 20,000 price band contributed to 86% of its overall sales in July.
“For the upcoming months, we will continue to focus on this segment and introduce more smartphones for our users and are aiming to capture 20% market share,” the spokesperson said. Realme had a 9.8% share in the second quarter.
Xiaomi, Samsung, Oppo and Vivo did not comment on the trend in sales.