As the Indian cellular market goes through consolidation and aggressive 4G roll out, demand for smartphones will continue to grow. With smartphone penetration maturing in many developed markets, continued growth in the world's third-largest smartphone market makes India an attractive market to device manufacturers. Smartphones in India are expected to account for 62 percent of all mobile phone sales in 2018, predicts Gartner. With the slowdown in sales in major markets, including the US, China, and mature Western Europe, India represents the largest opportunity because it is the second-largest mobile phone market after China.
In addition, demonetization in India through the elimination of 500 and 1000 rupee notes caused an increased push from the government for digital currency, as well as people becoming more open to using digital payment methods. The rise of digital currency is bringing a new use case for smartphones, which, in turn, is set to trigger higher demands for smartphones. This opens the opportunity for service providers to launch mobile wallet solutions or even vendors to launch their exclusive mobile payment solutions like Android Pay or Apple Pay to build an ecosystem.
Leading global vendors, Samsung and Apple, have made exclusive plans to grow their shares in the market. Major Chinese manufacturers, such as Gionee, Huawei, Oppo, BBK (Vivo), Xiaomi, Lenovo, etc., have committed big investments to exploit the growth opportunity. Ever-rising competition from Chinese manufacturers has not only troubled top local brands such as Micromax, Intex, Lava, and Karbon Mobile but also resulted in a decrease in smartphone market share for Samsung in India. The growing ASP trend will be maintained in the coming years with the increasing middle-class population and rising per capita income leading to more disposable income to be spent on electronic goods.