Why investors have their eyes and pockets set on Indian smartphone markets?
Researchers on smartphone markets claim that India is expected to overtake the US as the second-largest smartphone market by next year with rapid annual growth.
The country’s smartphone market will grow at a compounded annual growth rate of 23% through 2018 and would account for 30% of the global growth during the period, states the study of the report made on global technology and telecom.
“We expect India to overtake the US next year as the second-largest smartphone market by units. India will grow nearly five times faster than the world’s largest smartphone market, China, where growth has decelerated,” says the Morgan Stanley research report.
It also added, that an estimate of a 23% CAGR in units in India, as compared with 5% over the same period in China. By 2018, they estimate 192 million smartphones will be shipped to India or 11% of total global units.
Morgan Stanley said there are only 225 million smartphone subscribers in the country, accounting for 18% of the total population.
Improvement in demographics, as measured by declining age dependency, has been one of the most important factors supporting higher potential growth in India… Consumption is expected to stay with relatively high growth rate, driven by an increase in per-capita income growth and an emerging middle class, it noted.
On consumption of data, the report said the country is in between significant growth in data traffic driven by rising data users and growing data usage per user.
India’s internet penetration is expected to reach 50% by 2018, up from 26% last year, driven by rising smartphone availability and affordability, online content and changing user behavior.
The global consultancy estimates 4G smartphones will account for 75% of 170 million shipments by the next year, which currently has less subscriber penetration in the country.
The report, which is based on 2,600 urban smartphone buyers, said that the respondents paid an average of Rs 8,500 for their smartphones and plan to spend 40% more on their next phone.
