Thread by @jshilanjanm

Indian smartphone sales drop to lowest in 4yrs! That’s the catchy headline they report 😅😅

The important truth comes out only when one breakdown the numbers 👇

Smartphones sold in India (crore).
’19: 15.2
’20: 15.0
’21: 16.1
’22: 14.4

This is what media circulates, calling it stagnancy.

But, a deep dive by segments shows, nothing’s stagnant at all:

<$150 📛:
👉 Vol -24% YoY
👉 Mkt share: 46% vs 54% last year

$150-300 🚀:
👉 Vol +15%
👉 Mkt share: 38% vs 36% last year

$300-500 🚀:
👉 Vol +20%
👉 Mkt share: 10% vs 8% last year

> $500 🚀🚀:
👉 Vol +55%
👉 Mkt share: 6% vs 2% last year

Context matters 👇

🔆 The market is no more the same as what it was 4yrs ago. It has not really stagnated. But, changed

🔆 From ’16 to ’19, India’s internet penetration zoomed like crazy, thanks to Jio making 4G upgrade a norm

🔆 As a result, 70%+ Indian adults now hold a smartphone, with a massive majority being first-time users with entry-level 4G smartphones

Thus, the market for entry-level smartphones is well-saturated & bound to mature.

And as chunks of these users move to more feature rich higher priced phones, the market for entry-level phones will obviously de-grow.

What matters is to find out if the sales for entry-level smartphones is going down, is the sales for higher-priced phones taking-off?

And the numbers above clearly show that’s happening in a big, robust & heartening way! 🚀🚀

The market today is gulped by a premiumization wave.

The same is also reflected in the overall market’s average selling price.

👉 ASP: $224 (+18% YoY)
👉 That’s Rs 18.5k vs Rs 15.7k last year

That’s quite a big enough number for the pan-India market.

And given we know the number of smartphones sold in these years, that translates to a 5% jump in overall value of sales, vs the 10% volume decline!

That’s a big 15% differential which says- It’s all about premiumization baby! 😅

Market is not going downhill, as reported by the media in their hook-driven headlines.

Fundamentals have moved from the adoption of smartphones to usage, upgrades & aspiration-driven growth.

Just look at the $500+ segment!

🔆 Apple has a 60% share & its iPhone 13 was the 3rd most sold smartphone across segments in ’22

🔆 Also its sales have grown over 6x in mere 5yrs!

That’s premiumisation wave at its grand magnum opus 🚀

The same is also validated by the fact that new launches in the premium segment have gone up in a big way, while the entry & medium-level launches have fallen dramatically.

🔆 Brands know, their consumer are demanding better features like higher memory, 5G, better camera, etc.

🔆 It’s all about the market turning aspirational, just as it played out in China as well

🔆 And with growing ways to finance the gap between aspirations & affordability (credit cards, EMIs etc), this will only strengthen going forward.

Biz News+ WA group: openinapp.co/9mioi

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