Nine companies to exit smartphone market in India in 2017
The Indian smartphone market will enter uncharted territory in 2017 with more exits of players than entries, underlining heightened competition in the world’s fastest-growing smartphone market, which has seen a sharp slowdown in the pace of growth this year.
Most of the past couple of year’s entrants could not generate enough revenue to sustain the intense competition in India, which will push a number of them out, said a Counterpoint Research report.
It expects seven entrants in 2017 compared with nine exits. This compares with 13 newcomers in 2016 versus five exits.
“Almost 80% of entries and exits are estimated to happen in sub-$100 segments (Rs 6,800), involving regional players unable to generate volume and thus scale up a portfolio,” said Tarun Pathak, senior analyst at the firm. There are over 100 smartphone players in the Indian smartphone market, of which the top 15 contribute almost 90% of the share.
With declining margins amid cut-throat competition, Counterpoint forecast some smartphone players will call it quits in 2017, such that a number of exits in the smartphone market will exceed the number of entrants.
Some signs of this trend are already showing — smartphone sellers like Microsoft, Acer and Phicomm moved out of the race — and the competition, will only intensify in 2017 and lead to consolidation in the smartphone market, the research added.
The Indian smartphone market itself has seen slowdown with growth at only 6% in 2016, on year, as per IDC, as opposed to double digits that were seen in the previous years. Analysts attribute the slowdown to fewer feature phone players moving to a smartphone as the key reason.
A recent study conducted by the Mobile Marketing Association, in association with Kantar IMRB, showed that almost 85% of feature phone users don’t intend to move to smartphones.