User Devices: Growth by Sub Segment- India continues to connect, smartly!

User Devices by Segment Revenue (FY 2017-18)

User Devices: Sub Segment% Marketshare (FY 2017-18)

In term of revenue, the overall user device market grew from Rs 1,18,795 Crore in FY 2016-2017 to Rs 1,68,920 Crore in FY 2017-2018. The devices are the only encouraging segment across telecom equipment and infra segment, witnessing an impressive growth in the past few years. Today devices are over 58% of the total telecom infra and equipment by revenues.

Mobile Handsets

The Indian smartphone market witnessed a boom with mobile companies making a kill in one of the largest and exciting smartphone market of the world. From domestic manufacturers like Reliance Retailto global giants like Samsung and Xiaomi, companies want to jump the bandwagon of growth to cash-in the rising demand. From Q2, 2017 to Q1 2018, around 26 crore units were shipped and sold in the country with 44% being smartphones. The current growth numbers make India one of the fastest growing markets amongst the top 20 smartphone markets globally. The market saw a slight shift towards premium smart phones. Focusing on revenue, Samsung retained the top spot in both mobile devices & overall user devices segment. However, in terms of volume, Samsung’s share has started witnessing a slight dip with Chinese counterparts like Xiaomi & Vivo catching up quickly. Chinese smartphone maker Xiaomi registered an incredible performance in 2017, and its market share grew by nearly two-fold in Q3 2017. The company grabbed the top spot from Samsung in the Q4 of 2017.

India is one of the world’s largest feature phone markets. Year 2017-18 witnessed a growth in the feature phone market after declining for three consecutive years. While feature phones remain relevant to a large consumer base in India, launch of JioPhones was a big highlight of the year. In July 2017, Reliance Retail launched JioPhone. Based on KAI OS, the phone has led to the beginning of a new generation of ‘Fusion Phones’. With Wi-Fi, GPS, Bluetooth and 4G, it comes packed with 512MB of RAM & 4GB of internal memory and provides free subscription of Jio apps. This played a key role in increasing 4G penetration in India, especially the rural areas. JioPhones were shipped in large numbers taking the leadership position on its maiden quarter in this category. Riding on its popularity & penetration, in July 2018, Jio Phone 2 has been launched. It comes with full QWERTY keypad and at price of Rs 2999.

Xiaomi taking a lead over Samsung in the smartphone market in some quarters and Reliance Reliance emerging as the leading feature phone company in India were the two key highlights of 2017-18. Their growth can be attributed to both aggressive pricing and online sales. However, Reliance Retail has a complex business model, where in the device is effectively free, it does not translate into revenues for the company, from a device point of view.

Tablet PCs

The Indian tablet market grew slightly from Rs 3,607 Crore to Rs 3,835 Crore with Samsung, Apple and Lenovo in the top 3 spots, in terms of revenue. In terms of volume, Lenovo continues to lead the Indian tablet market. This year, entry-level tablet devices with lower pricing &questionable performance saw a dip in the market share due to discontinuation of a popular government practice of providing Tablets to citizens under various schemes and programmes. Interestingly, the tablet market has generated a new breed of enterprise users, including restaurant managers, traffic police, salesmen, courier men, and ecommerce delivery boys. This segment will continue to witness further traction in the coming times, with new enterprise use cases springing forth. Similarly, Lenovo entered into the education segment, with introduction of its tablets in institutes like Akash and FIITJEE. This has helped the product company grow its base in the education sector in the first quarter of 2018. In the coming times, the government buying will continue to drive the momentum in tablet category. The continued focus of Government of India on Digital India will invite more government departments to participate in digitalizing their processes, which will further spur growth in this category.

Data Cards

Note: The top 3 are OEMs to Reliance Retail for the JioFi device

The Indian data cards market achieved applaudable percent growth in 2017-18 fuelled by the growth in 4G subscriber base. The shipments grew by 34% in term of volume when compared to last year. Reliance Retail’s JioFi devices contributed largely to market share. Reliance Retail is the leader in the Indian data cards market in 2017-18 thanks to the success of JioFi MiFi devices. Reliance Jio has more than 225 million 4G subscribers in India. Data card shipments from other vendors, including iBall, Intex, and Micromax registered continuous decline. They gradually moved out of data cards market by the end of 2017 due to poor performance. Reliance Retail’s JioFi models captured the top five spots. Home Router market witnessed downfall post launch of JioFi devices. Capitalizing on the limited coverage of WiFi routers and their continuous requirement of power, MiFi devices with their inbuilt battery along with portability feature captured the space.