5G smartphones are leading the sale of mobile phones in India in the festive season. According to industry experts and analysts, nearly two out of five devices sold in holiday sales, both online and offline, in the first week were equipped with 5G technology, representing the highest market share of 5G phones in India in any given period.
The share of 5G phones among all smartphones sold in the first week should be between 30-40% of all phones sold. That share could have been larger – but a large stock that has been outstanding for more than 10 weeks has seen retailers extend their 4G phone offerings into the budget segment, said Tarun Pathak, director of research at market research firm Counterpoint India.
However, Pathak added that the greater influx of 5G phones in the total market share will lead to higher average selling price (ASP) of smartphones in the Indian market. “Given that 5G devices are largely coming at higher prices, we should see ASP rise by about 10-12% in the first week of this year’s holiday sales,” he said.
According to Pathak, the first week of 2021 holiday sales saw the price of ASP smartphones in India pegged at around INR 15,500 – a figure that could rise to INR 20,000 given the greater prevalence of 5G devices in the country.
The first week of festive sales typically sees a spike in ASP each year, fueled by consumers looking to cash in on deals and discounts on premium devices — like Apple’s iPhones and Samsung’s flagship Galaxy S series.
However, while larger sales volumes in the budget segment typically eventually outpace premium phones, analysts say 5G devices could see a spike in ASP this year.
This increased ASP comes as a boon, given that the smartphone market is not seeing a growth in the number of devices shipped. As a result, despite a flat sales trajectory, smartphone retailers should see higher revenue than last year.
Sanjay Kothari, associate partner at market research firm Redseer, said the first week’s Gross Marketing Value (GMV) of festive smartphone sales could see 20% year-over-year growth, driven by sales of higher-priced 5G smartphones.
“While you have the likes of Apple and OnePlus pushing premium smartphone sales at deep discounts, the budget 5G smartphone segment has also seen good demand,” he said.
Manish Khatri, partner at Mumbai-based retailer Mahesh Telecom, said that in the budget segment, Samsung saw strong demand due to deals that cut basic 5G phones below INR 15,000.
“On the other hand, you have huge discounts on phones like the Samsung Galaxy S22 Ultra and S20 FE, which saw strong demand from Samsung during this period,” Khatri added.
The festive season – considered by industry stakeholders as the five-week period from the last week of September to the end of October every year – is certainly the most valuable period for the smartphone industry in India. These five weeks account for nearly a fifth of smartphone sales for the entire year, making it a crucial period for brands.
The holiday season of 2022 is even more significant, as shipments of smartphones in the country have fallen for three consecutive quarters this year – an unprecedented trend.
While the demand for 5G phones is a positive sign, experts say it’s too early to view this period as a sign of a market recovery.
“It is difficult to expect the market to ship more than 50 million units each festive quarter. According to preliminary estimates, we expect shipments during this period to remain flat – or see very marginal growth at best – during the holiday period of 2021.”
Singh added that the surge in 5G phone sales is a natural way forward, given that carriers are expected to roll out the first phase of 5G services to consumers next month. That, in turn, could see phone makers find some relief thanks to higher revenues – even as consumer demand remains tepid at best.
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