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Indian smartphone adoption surges

News, 13 April 2015

BANGALORE: Smartphone adoption in India is expected to record a compounded annual growth rate (CAPGR) of 36% over the next five years, a new report has forecast.

There were about 81m smartphone shipments in 2014, but this should rise massively to 651m by 2019, predicted management consultants Zinnov India.

It said growth is being driven by increasing competition, which is pushing down prices, ease of access to content and language localisation, growth of internet-enabled services as well as government initiatives like the "Make in India" campaign.

Just how important price and competition is influencing the Indian market was reinforced earlier this week when Lenovo India revealed that about three-quarters of its sales come from smartphones priced under Rs 10,000.

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The "unstoppable surge" of smartphones in India continues, the report went on, as it pointed to 29% of the urban population, with a base of 409m users, adding to adoption growth.

Smartphones are already outpacing the growth of feature phones, it said, but warned domestic vendors that they need to adapt to face off stiff competition from Chinese brands.

Xiaomi, for example, recently surpassed all other brands for sales of 4G LTE devices and this week stepped up its expansion plans in India by announcing it will sell its phones through The Mobile Store retail chain as well as online retailers Flipkart and Amazon India.

Arvind Rawat, engagement manager at Zinnov, warned Indian smartphone brands that they will need to differentiate themselves to head off growing competition from overseas.

"With consumers spoilt for choice, domestic smartphone vendors will have to increasingly focus on streamlining operational processes and investing in R&D for differentiation," he said.

Data sourced from Zinnov India, BGR, Reuters; additional content by Warc staff