• Thu. Dec 1st, 2022

Rising Internet Penetration and Falling Prices Drive India’s Mobile Phone Market

ByCindy J. Daddario

Jun 28, 2022

Article by: Frost & Sullivan

According to Frost & Sullivan, increasing internet penetration and falling smartphone prices have fueled the growth of India’s mobile phone industry.

According to the latest research from Frost & Sullivan, rising internet penetration and falling smartphone prices have fueled the growth of the mobile phone industry in India.

While the demand for smartphones is declining worldwide, the Indian mobile phone market remains underpenetrated and growing. This presents substantial opportunities for every participant in the mobile value chain. The total mobile phone market (feature phones and smartphones) is expected to generate INR 2.4 trillion in revenue by 2026, up from INR 1.4 trillion in 2022, registering a compound annual growth rate (CAGR) of 14 .5%. In terms of volume, the Indian mobile phone market consisted of 255 million units in FY22, which is expected to grow at a CAGR of 9.7% to reach 370 million units by EX26. Chinese brands, such as Xiaomi, Oppo, Vivo, Realme, and OnePlus, accounted for 71% of India’s smartphone market share in FY22, while foreign (excluding China) and Indian brands accounted for 25 % and 4% remaining, respectively.

“Government mandates and support in terms of legislative and financial incentives are critical for the mobile phone market, influencing its growth,” said Rajkumar Elilarasu, Principal Consultant, Industry Practice at Frost & Sullivan. “In addition, the government’s Production Linked Incentive (PLI) program helps mobile phone manufacturing companies increase their sales year-on-year. Currently, India is the second largest exporter of mobile phones and is fast becoming a global manufacturing hub.

“India has the potential to export mobile phones worth around $100 billion and components worth $40 billion by FY26. Indian-made phones are popular in the Middle East and North Africa region, providing India with considerable export market potential as well as domestic sales.

To tap into the growth prospects created by the booming Indian mobile phone market, manufacturers need to:

  • Focus on mobile phones with advanced features: The growing demand for affordable mobile phones with higher processing speeds, RAM size and storage presents lucrative growth opportunities.
  • Focus on designing mobile phone manufacturers’ own apps (apps): mobile phone users in India downloaded about 20 billion apps in 2021, and forecasts see that number increasing to over 35 billion downloads by 2025. This growing demand may pave the way for original equipment. manufacturers (OEM) to develop their own applications.
  • Explore contract manufacturing: OEMs can manufacture for other brands with their manufacturing setups to gain scale advantages. This will provide additional revenue streams and maximize the ROI of manufacturing facilities.
  • Address both urban and rural markets: OEMs’ online presence drives sales in urban areas, while an offline presence is key to reaching customers in rural areas.
  • Utilizing the Growing Adoption of 5G Mobiles in India: The 5G mobile market is expected to peak after the launch of 5G spectrum bands by the government, which is expected by the end of 2022.
  • Focus on exports to establish a global footprint: The Indian government’s PLI program is expected to increase the total number of mobile brands exporting from India and help them generate more export revenue in addition to revenue from mobile phones. national sales.