Smartphone sales in India take a beating as 4G feature phones become the new growth drivers

India currently ranks second behind China in terms of the number of mobile phones in use. And over the past couple of years, Indians have been increasingly adopting smartphones due to the entry of cheaper Chinese brands like Xiaomi and Honor and lower data tariffs than before.

However, despite the increased adoption, smartphone sales in the country took a plunge last year, after cheaper 4G feature phones like Reliance's JioPhone took the market by storm.

According to German research firm GfK, smartphone sales in India fell 3 percent in the fourth quarter of 2017 as low-priced 4G feature phones may have eaten into their sales.

Also read: 2G Internet will be phased out by June 2019; what does it mean to you?

This also affected the overall sales for the Emerging Asia region — consisting of India, Bangladesh, Vietnam, Indonesia, Cambodia, Malaysia, Myanmar, the Philippines and Thailand — which witnessed a fall of 1 percent in the fourth quarter of 2017, GfK said in its report.

"Emerging Asia saw smartphone sales of 58.6 million units in 4Q17, down 1 percent year-on-year. This was dragged by a 3 percent decline in India, where a proliferation of low-priced 4G feature phones likely cannibalised smartphone sales," it said.

For the entire 2017, a total 232.7 million smartphones were sold in the Emerging Asia region, which is an 8 percent increase compared to 2016. GfK forecasts regional demand growth to improve to 9 percent this year.

"The outlook for 2018 is positive as GfK forecasts global demand to rise by three percent compared to 2017, driven by Emerging Asia and Central and Eastern Europe," said Yotaro Noguchi, product head in GfK's trends and forecasting division.

Sales in the Developed Asia region, which includes countries like China, Japan and South Korea, hit 18.5 million units in Q4 2017 — a 9 percent dip year-on-year contributed mainly by a 21 percent decline South Korea, the home country of smartphone titans Samsung and LG.

In the entire year 2017, smartphone sales in Developed Asia region totalled 68.5 million units — a 6 percent fall compared to 2016. However, GfK forecasts a 2 percent growth improvement in 2018, driven by a positive growth in Japan.

Meanwhile, globally, 397 million smartphone units were sold in the fourth quarter of 2017 — a 1 percent increase year-on-year. The total revenue generated was $144 billion (approx Rs 9.16 lakh crore), the data revealed.

Most of the demand in the fourth quarter was driven by the Middle East and Africa, which experienced 8 percent growth, and from Central and Eastern Europe, which saw 7 percent growth.

"Smartphone year-on-year demand growth moderated for the fourth consecutive quarter, rising only 1 percent to 397 million units in Q4 2017. However, the sales value increased by 11 percent y-o-y in the quarter, which is exceptional growth for such a mature technology category," said Arndt Polifke, Global Director of PoS telecom research at GfK.

Meanwhile, in the entire calendar year 2017, more than 1.46 billion smartphones were sold the world over, and the revenue generated was a whopping $479 billion (approx Rs 30 lakh crore).

Inputs from IANS