Apple is back, Vivo inches closer to #1
As per IDC Tracker, Apple has shipped a whopping 68% in the US $700–1000 (Rs. 52,500–75000) category thanks to the iPhone 11. However, India remains a developing country with majority shipment in sub-$200 (Rs. 15,000) category. Average Selling Point for smartphones in India at US $171 (Rs. 12825).
It is no surprise that Apple has taken the lead with a 68% share in the ultra-premium segment US $700–1000 (Rs. 52,500–75000). Launch offers made the iPhone 11 an excellent deal for people who would usually opt for a Samsung or OnePlus phone. The US$500 segment remains a hotly contested segment between Apple, Samsung, and OnePlus. Apple was able to capture a 62.7% share of the market, though IDC does not mention why an educated guess would be the pricing of iPhone XR. For the US $500+ segment(Rs. 37500+), overall India leader Xiaomi is betting on the Mi10 with its 108 MP Quad camera as the primary KSP.
A notable addition to this segment would be Apple’s iPhone SE, a notable exit from this segment is the BBK-backed -> iQoo. Due to the COVID-19 outbreak, iQoo 3’s price dropped to Rs. 34,990 from Rs. 38,990. The key drivers for the growth in the US $ 500+ (Rs. 37,500) segment remain brand value, consumer trust, and value for money.
Shipments in the US and China market declined by 16% and 20.3% respectively, however, the Indian market grew by a grace saving 1.5% Year-On-Year (YoY). According to Upasana Joshi, Associate Research Manager, Client Devices, IDC India, “The online channel grew by 9.0% YoY in 1Q20 due to multiple new launches, attractive discounts, cashback offers, and affordability schemes registering a share of 43.1%. On the other hand, offline channel shipments declined by 3.5% YoY, owing to fewer consumer offers, fewer retail walk-ins, and a more aggressive portfolio available on e-Tailer platforms across leading brands.”
COVID-19 outbreak & containment is going to set the theme for the rest of 2020. As per Navkendar Singh, Research Director, Clients Devices & IPDS, IDC India, “COVID-19 will have a substantial impact on the Indian mobile phone market in 2020, with potential supply chain disruptions and slower-than-expected consumer demand for the next few quarters. IDC expects the Indian mobile phone market to follow a U-shaped recovery from 3Q20 onwards. The pent-up demand from the first half of the year will gradually shift to the second half, rolling over to 2021 as well.”
As evident from the image above, Xiaomi not barring browser privacy issues continues to dominate the market. The company grew at a modest rate of 3.4% YoY accounting for 22.3% share. vivo grew at a healthy rate of 63.3%, Samsung declined by 28.4%, realme grew at a mind-boggling 70% while OPPO slipped to 5th position with a growth of 41.0%. The interesting thing to note here is considerable growth for Xiaomi and vivo have been from offline channels clocking at 20.1% and 29.8% respectively. It would be interesting to see if these brands can continue to thrive with realme snipping at its toes with the realme 5i, 5s, C2/C3,6. OPPO needs to reinvent or invest in its online channel, they are hiring for an eCommerce head indicating that the brand is considering making moves.
A decline of 3.8% (-33.8% YoY) in the mid-premium segment (US$300<500, Rs. 22,500-Rs. 37,500) in conjunction with doubling of mid-range segment (US$200< 300, Rs. 15,000-Rs. 22,500) to 18.2% in 1Q20 could indicate a depreciation of appetite amongst Indian consumers. As to when will a sense of normalcy will return, Mr. Navkendar Singh is cautious stating, “A revival in consumer demand is expected around the festive quarter of 4Q20; with amplified marketing and promotional activities. In these challenging times, brands must relook at their marketing investments, supporting offline channels with hyperlocal delivery initiatives in key cities and try to make up for the lost ground in the all-important second half of year, under the assumption that normalcy will gradually resume Q3 onwards.”
COVID-19 is forcing brands to reinvent at a rapid clip. In respect to hyper-local delivery, Xiaomi has taken a lead but with midnight changes to zoning criteria, it will be a challenge to maintain.
You can read the complete report by IDC here.