Smartphones turn smarter in 2015, Gear up for 4G Ride in 2016

NEW DELHI: With Smartphones turning smarter every passing day, it is the domestic players and new Chinese entrants to the market that continued to challenge global giants like Apple and Samsung in 2015 and the New Year can be much more exciting with the expansion of 4G services.

Emerging as a big force in the global Smartphones market during 2015, India saw about 75 million devices being shipped in the first three quarters of the year. The pace of the blistering growth was further strengthened by the online channel as many handset makers added eCommerce only devices.

The strong pace is expected to help India replace the U.S. as the second largest market globally, after China.

"Smartphones as a category have grown at a phenomenal pace this year and this is across price points. In the coming year, there will be a lot of action in 4G as operators expand coverage.

"With 4G network rollout, India will become one of the biggest mobile internet markets in the world leading to the launch of many services that consumers can benefit from," homegrown Micromax co-founder Vikas Jain told.

About 40 per cent of smartphones being shipped are already on 4G and more than 9 crore 4G subscribers and 18 crore 4G smartphones can be there by 2018, he added.

A major driver of this growth has been online sales.

"One in three smartphone in October was sold using the digital platform. With a lot of discounted offers, 'exclusive-to-online' products accounted for about 17 per cent of the total smartphone volumes, while the overall online including marketplace touched around 25 per cent of the volumes," he added.

The online platforms gave a lot of Chinese brands an easy launchpad for India without much investment in the distribution and service channels.

The year ahead would continue to see "intense action", especially in the entry-level smartphone market, as companies look to upgrade feature phone users. With 60 per cent of the user base still on feature phones, the expectation is that close to 70-80 million feature phone consumers will switch to affordable smartphones.

Mike Wang, CEO at OPPO Mobiles India, said the ongoing trend of affordable smartphones will continue in the coming year with launch of more mid-segment smartphones.

Year 2016 is also expected to see introduction of new brands like LeTV, a trend seen this year.

A trend that could become the mainstay in the year ahead could be services-laden smartphones.

The app ecosystem grew fast this year with users graduating from just using gaming apps to services-oriented apps like Ola and Uber to book cabs, foodpanda to order food to using mobile wallets like Paytm and Mobikwik.

"There will be a stronger collaboration between the device, access and service eco-system going ahead. The entire mobile ecosystem will come with the launch of a number of services across sectors like entertainment, travel, healthcare and banking."

"We will see partnerships to foster a culture of innovation, creating solutions that can take care of indigenous needs and building an empowered ecosystem for permeating technology into the nooks and crannies of the country," YU Televentures founder Rahul Sharma said.

The key to this growth will be simplification through relevant services and availability of these in various Indian languages, he added.

"Phenomenal internet growth, investment into infrastructure by operators, better mobile screens and improved quality of curated content and services are the major key drivers to create a need of VAS ecosystem. Such boom has given space and opportunities for lots of startups in India," Intex Business Head (Mobiles) Sanjay Kalirona said.

Saurav Kumar, CEO and co-founder of Cube26, said software driven experience will be key driving factor for brands, giving them an edge over their competitors. "Software differentiation will drive both monetisation and leadership for phone companies," he added.

The year also saw Prime Minister Narendra Modi's 'Make in India' initiative gathering steam with a slew of handset makers including the likes of Xiaomi, Motorola, Gionee and OnePlus investing in local manufacturing.

In December last year, the government had set up a joint task force, which included industry representatives from Samsung, Microsoft and Lava, to rejuvenate nation's mobile phone manufacturing ecosystem with a view to achieve production of 500 million units of mobile handsets by 2019.

The target also includes 15 lakh plus jobs and a component industry of 50,000 crore by 2019-2020.

"We are witnessing strong green shoots already," Indian Cellular Association (ICA) National President Pankaj Mohindroo said, while adding that global giants like Foxconn will also play an equally significant role.

Players like Lava and Micromax are looking at bringing the entire manufacturing ecosystem to India.

Estimates suggest that close to 30 per cent of the handsets being sold monthly are now being manufactured or assembled locally.

Newer trends like more powerful wearables and newer devices based on Internet of Things could hit the market.

"It has been a tremendously successful 2015 for the smartphone & wearable industry. In 2016, we believe that e-commerce will continue to drive change in consumers buying behavior and further move up in the growth trajectory. An important growth area will be the wearable category, becoming increasingly main stream in 2016," Amit Boni, Country Head at Motorola Mobility India said.

Kumar added that the sector will see a lot of innovation in terms of hardware and design along with good amount of focus on integrated software.
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