Xiaomi Leads Indian Smartphone Shipments In Q3 2022

Smartphone shipments to the country fell 6% year-on-year (YoY) to 44.6 Mn in the third quarter (Q3) of the year (CY22), according to the data released by analyst firm Canalys.

Interestingly, the shipments in Q3 were the highest so far this year. Compared to 36.4 Mn units in Q2 CY22, shipments surged more than 22% in the July-September quarter.

Continuing their dominance in the Indian smartphone arena, Chinese vendors accounted for 76% of the total shipments during the period.

Xiaomi continued to lead the charts as it shipped 9.2 Mn units, driven largely by online sales around the month of July. Samsung came second with 8.1 Mn shipments as the brand saw ‘strong momentum in the mid as well as high-end category. 

Vivo came third, shipping 7.3 Mn units, while Oppo emerged at the fourth position with 7.1 Mn smartphone shipments. Smartphone manufacturer realme dropped to the fifth position, shipping 6.2 Mn units.

“The good news is, as the festival season began, in the last few weeks of the quarter, consumer demand improved. Hit by inflation, entry-level device contribution declined this year, while the mid-to-high segment performed relatively well thanks to aggressive promotions,” said an analyst at Canalys Sanyam Chaurasia.

The report noted that OPPO’s OnePlus and Vivo’s iQOO led the sales in mid-range smartphones while the demand for ultra-premium smartphones witnessed a strong uptick largely on account of discounts. 

Pointing out that Samsung offered deep discounts for flagship smartphone models of older generations, Chaurasia said that these price cuts were deployed across both offline and online channels. 

A similar trend was also witnessed among Apple products as the demand for the heavily discounted iPhone 13 outstripped the latest iPhone 14.

While Q3 witnessed the highest shipments this year, the numbers were still damp compared to the previous year. Raging inflation, a depreciating Rupee and apprehensions of a recession have badly hit the sales of low-end smartphones. With consumers looking to save amid rising costs, splurging on a smartphone appears to be least on the list. 

“Business activities remained resilient as India’s consumer confidence is gradually improving. However, the Indian Rupee has steadily depreciated against the US dollar since June…. Importers will continue to feel the heat from an operational perspective, especially rising material costs,” added Chaurasia. 

Canalys expects these challenges to continue well into Q4, largely affecting price-sensitive consumers. 

The Race Towards 5G 

Meanwhile, the report also noted that 5G devices were also gaining popularity in the country, adding that the ultra-affordable 5G handsets were unlikely to hit the market in the near term. 

“Entry-level brands are also trying to capitalize on 5G opportunities. Jio and Google are developing the most affordable 5G smartphones to compete with major brands. Although from a cost perspective the ultra-affordable category is unlikely to hit the market in the near term as 5G chipsets are unlikely to decrease in price dramatically,” said Canalys’ Chaurasia.

As telecom operators rush towards 5G deployment, the analyst firm said that it was the ‘perfect timing for vendors to push their 5G portfolios to smartphone upgraders in the next couple of years.’

Interestingly, the comment also comes at a time when original equipment manufacturers (OEMs) are rushing to push out 5G updates. While Xiaomi intends to release software updates for its 5G phones this Diwali itself, Samsung and Apple have set mid-November and December timelines, respectively, to roll out the updates. 

While PM Narendra Modi launched 5G services in the country earlier this month, the government has been pushing smartphone manufacturers to release software updates to enable 5G on smartphones. It is pertinent to note that a part of the reason has been that OEMs in the country are yet to upgrade their systems to support 5G adoption. 

The Q4 numbers are expected to bring further cheer to the smartphone manufacturers on account of the festive season. While the shipments have been steadily rising, the growth momentum faces tough challenges ahead as inflation and depreciation of Rupee could likely play spoilsport for the industry.