India's smartphone market declines 2% YoY in 2020: IDC

After several years of growth, the smartphone market in India registered a 1.7% YoY (year-on-year) decline in 2020, according to International Data Corporation’s (IDC) quarterly mobile phone tracker report.

The nationwide lockdown, remote work, remote education, travel restrictions, and manufacturing shutdowns led to a sluggish H1 2020 (-26% YoY decline), particularly impacting the second quarter of 2020, the report added.

However, H2'20 recovered, with 19% YoY growth, as markets reopened gradually. Q4’20 (October-December) posted record fourth-quarter smartphone shipments of 45 million devices, with 21% YoY growth.

While smartphone shipments for the full year 2020 remained below the pre-pandemic level, IDC believes a stronger market acceleration in 2021 will be led by upgraders.

The top five smartphone vendors for the period were Xiaomi followed by Samsung, Vivo, Realme and OPPO. 

“The rebound of the smartphone market in the latter half of 2020 underscores the importance of devices in our day-to-day lives. In 2021, IDC expects the smartphone market to grow in high single-digit YoY, driven majorly by upgrading consumers, in the mid-range segment and affordable 5G offerings (~$250). Also, revamped offline channel play is anticipated, to bring back growth in the very important brick and mortar counters for long term sustainability,” Navkendar Singh, research director, client devices and IPDS, IDC India said.

The online channel outpaced the overall market, growing by 12% annually with a 48% market share in 2020. Multiple sales events, promotions, trade-in/upgrade programmes, and affordability initiatives helped it clock a record 51% share in Q4’20.

However, in the pre-Diwali weeks of October and November, retail footfall gradually picked up the pace, as the offline channel registered 5% YoY growth in Q4’20.

5G smartphone shipments crossed 3 million in 2020, with higher prices as well as a lack of 5G network limiting 5G smartphone sales. 

"As more 5G devices enter in 2021, the ASP for smartphones is expected to rise. IDC expects vendors to launch 5G devices at multiple price points backed by aggressive promotions, as 5G currently remains a novelty rather than a necessity to most," Upasana Joshi, Associate Research Manager, Client Devices, IDC India said.