India's smartphone market faces stagnation in 2024 amid marginal growth: IDC report

India's smartphone market, which witnessed marginal growth in 2023, is now facing stagnation, according to the latest report from the International Data CorporationIndia's smartphone market, which witnessed marginal growth in 2023, is now facing stagnation, according to the latest report from the International Data Corporation. With an estimated flat to low single-digit annual growth projected for 2024, the industry is poised for a challenging year ahead. Furthermore, the report provides insights into price segment leaders, the growth of 5G and foldable phones, and changes in chipset market share. Xiaomi, Apple, Samsung, and other major players continue to compete for market share amidst evolving consumer preferences and technological advancements.. With an estimated flat to low single-digit annual growth projected for 2024, the industry is poised for a challenging year ahead.

In 2023, the market experienced a modest 1% year-over-year growth, with a total of 146 million smartphones shipped. Despite a promising 11% year-over-year growth in the second half of the year and a significant 26% year-over-year growth in the fourth quarter, consumer demand remained subdued. This resulted in excess inventory levels across distribution channels, even with price adjustments and promotional schemes from vendors.

One notable trend driving market dynamics is the steadily increasing average selling price (ASP), which reached a record US$255 in 2023, marking a 14 per cent year-over-year increase. This surge is primarily attributed to the growing share of the premium segment (US$600+) and the rapid adoption of 5G-enabled devices.

According to Upasana Joshi, Research Manager at IDC India, most brands resorted to price reductions and increased channel margins in the final quarter of 2023 to address inventory challenges. However, this cautious approach is expected to lead to a tepid start for 2024, with channels exercising restraint in stocking.

The report also highlights shifting dynamics in distribution channels, with online channel shipments declining by 6% in 2023, while offline channel shipments saw an 8% year-over-year growth. This trend underscores vendors' efforts to strengthen their retail presence, particularly in smaller towns and cities.

Furthermore, the report provides insights into price segment leaders, the growth of 5G and foldable phones, and changes in chipset market share. Xiaomi, Apple, Samsung, and other major players continue to compete for market share amidst evolving consumer preferences and technological advancements.

As India's smartphone market navigates through challenges and opportunities, industry stakeholders will need to adapt strategies to stay competitive in the ever-changing landscape.