Mobile shipments fall 25% as inventories pile up

Mobile handset shipments in India declined by 25% in the first quarter of 2019, with 4G contributing 66% to total shipments, according to a report.

Feature phone shipments plunged 49% while smartphones recorded a 10% growth, according to the CyberMedia Research (CMR) Mobile Handset Market Review Report for January-March 2019.

The research firm does not share the total number of shipments.

South Korean giant Samsung shipped maximum devices to capture the top spot with a 22% market share in the mobile handset. Its Chinese rival Xiaomi stood at second position with a 16% pie. India-based brand LYF, with a market share of 13%, was ranked third.

In the smartphone segment, Xiaomi bagged the pole position with a 30% share of the market, followed by Samsung at 27%, Vivo at 12% and Oppo at 7%. Chinese handset brands continued to dominate the overall mobile handset shipments and the market share of Indian brands dipped to 30 % during the first quarter.

In the October-December period of calendar year 2018, there number of mobile shipments were almost flat, after witnessing a 13% decline in the previous quarter.

The year 2019 will mark the return to prominence of offline channels.

"All major brands that enjoyed an online-exclusive growth will now further expand aggressively in offline. The battleground for market dominance for mobile handset players will shift to India's hinterland. Plus, the focus on online channels will continue for smartphone brands," Prabhu Ram, head - industry intelligence group, CMR, said.

The decline in Q1 2019, according to him, was of temporary nature due to stock buildup from the festive season. Towards the end of Q1, the trend is picking up, he said.

The hyper-competitive nature of the smartphone market saw intense competition, resulting in a sequential decline of 10-12% for both Xiaomi and Samsung shipments.

The affordable smartphone segment comprising devices priced between Rs 7,000 and Rs 25,000, grew 75% while the value-for-money segment, which is handsets priced less than Rs 7,000, grew 22%. The premium segment, or phones in Rs 25,001-50,000 range, saw a marginal rise of 2.4 % in the shipments, according to the report.

"The overall market decline was on expected lines for Q1 2019. The above industry average stock buildup at the end of the previous quarter resulted in lower shipments. Also, the recent change in e-commerce rules in India impacted the online dependent players," Narinder Kumar, lead analyst - Industry Intelligence Group, CMR, said.

We expect the market demand to pick up in the coming quarters, with many new exciting launches lined up from all major brands, Kumar said.

With a pick-up in 4G services, it is expected that smartphones segment will continue to rise as more and more users start consuming data on their mobile devices.

WHAT’S CLICKING

• In the overall market, Samsung was on top with 22% share, followed by Xiaomi and LYF
   
• In the smartphone category, Xiaomi lead with 30% share, followed by Samsung and Vivo