Feature phone sales fall for first time in India: Report

NEW DELHI: Sales of feature phones, which drove mobile phone adoption in India, fell for the first time by 0.8% to 51.8 million units in July-September 2013 as smartphones continue to capture consumer interest.

Mobile handset shipments grew 10.9% to 62.9 million units during July-September 2013 aided by 152.3% jump in smartphone sales, a report by CyberMedia Research (CMR) today said.

On the other hand, the feature phone category witnessed a 0.8% decline year-on-year.

Of the total sales in Q3 2013, 51.8 million units were feature phones, while 11.1 million were smartphones.

"We have been saying that the way forward is smartphones. July-September 2013 is the first quarter to actually report this trend in numbers. This means vendors can expect to see large opportunities in the upgrades market where many feature phone users will upgrade to a smartphone," CMR Telecoms Practice Lead Analyst Faisal Kawoosa said.

It may also so happen that new smartphone purchases register lower volumes vis-a-vis upgrades but this phenomenon may be a few quarters away, he added.

"So there is going to be a huge opportunity as well as competition in the entry to mid-level smartphone segments, which is where the volumes would remain for a while," Kawoosa said.

Nokia was the leader in the overall (feature phones and smartphones) category with 18.9% market share, followed by Samsung (12%) and Micromax (10.8%).

Smartphones accounted for 17.6% of the total mobile handset shipments during July-September 2013 quarter with Samsung as the category leader (33.9%), followed by Micromax (19.7%) and Karbonn (9.5%).

"The India smartphones market continues to be a competitive space with close to brands vying with each other. Going forward, we expect this segment to be even more competitive as we expect some of the China-based ODM partners entering directly into the India market during H1 2014," CMR Telecoms Practice Analyst Tarun Pathak said.

Local handset brands have now close to 47% market share in the India's smartphone market.

This momentum has been a source of confidence to a couple of players to enter new geographies outside India where the smartphone market is on the rise, CMR said.

"Going forward, 3G smartphone shipments will continue to rise and we can expect to see a few smartphone vendors introduce 4G-enabled devices by the end of 2013," Pathak said.

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