SOURCE: Kantar Worldpanel ComTech

Kantar Worldpanel ComTech

May 10, 2017 08:00 ET

Kantar Worldpanel: Smartphone Market Growth in India Grabs Worldwide Attention

Expanding 4G Services Stimulate Domestic Sales, Global Manufacturers Increase Investments in Local Presence

NEW YORK, NY--(Marketwired - May 10, 2017) - New data from Kantar Worldpanel ComTech shows that smartphone vendors are reacting to saturated markets in the West by turning more aggressively to developing regions as sources of new revenue. Across the US, China, and EU5, smartphone sales have surpassed 90% of the potential market. Even in Latin America -- specifically Brazil and Mexico, smartphone sales also exceed 80%.

"With a population of 1.3 billion people and the second-largest mobile market after China, India is the next major focal point for smartphone vendors. In the first quarter of 2017, smartphone penetration in India reached 48%, a growth rate of 16% from the prior year," said Lauren Guenveur, Consumer Insight Director for Kantar Worldpanel ComTech. "Rapidly expanding 4G infrastructure and low-cost 4G data services introduced by India telecom leader Reliance Jio have led to increased competition in India and stimulated higher demand for 4G-capable devices. The push towards digital currency, which promotes a potent new use case for smartphones, is also expected to accelerate sales."

Chinese vendors have increased their smartphone sales share in India from 27% in Q1 2016 to 50% in Q1 2017. Xiaomi, Oppo, Vivo, and Lenovo have made significant investments in India in an effort to disrupt the local vendors, and out-maneuver South Korean giant Samsung, which continues to rank as the largest smartphone supplier in India with 27% of smartphone sales in Q1 2017. This is a dip from 30% in the same period a year earlier.

Xiaomi and BBK (Vivo) are currently tied for second place in India at 12% of sales each, followed by Lenovo (including Moto) at 11%, and Oppo at 10%. Local brands Micromax, Intex, Lyf, and others have captured 12% of India smartphone sales.

Apple accounted for three percent of sales in the most recent period but has made several strategic moves in India, including teaming up with Reliance Jio to offer free 4G service for one year to purchasers of iPhone 7 and iPhone 7 Plus. Apple is also planning to manufacture iPhones in India in the near future to deflect some of the high import taxes that make iPhones inaccessible to many Indian buyers.

Over the next 12 months, 51% of current mobile phone owners in India say they intend to upgrade their devices. For current smartphone owners, that number is 52%. Samsung is the top brand preferred in India at 26%, followed by Apple at 15%. Between 7% and 8% of consumers intend to purchase Vivo or Oppo products.

"Purchases over $300 remain a small fraction of the market, but this is where Apple and Samsung dominate," Guenveur added. "For Apple and Samsung, opportunities in India may not be immediate, but over the next few years we believe that consumers will become more engaged in services, 4G infrastructure will be stronger, and by all predictions -- people will want more premium phones."

Global OS Data

The latest data from Kantar Worldpanel ComTech also reveals that in Q1 2017 and despite an Apple earnings report that did not meet Wall Street's expectations for iPhone sales, the company continued to make year-on-year share gains across most markets except urban China.

"The first quarter of 2017 produced the lowest iOS share in China since the second quarter of 2014 with 12.4 percent of smartphone sales. Android continued to make year-on-year gains with 87.2 percent of smartphone sales," Guenveur explained. "For iOS, this represents a 9.1 percentage point drop from the first quarter of 2016. At the same time, iPhone 7 remained the best-selling device in urban China with 3.8 percent of a market that has become increasingly fragmented."

The greatest increase for Apple came in Great Britain, with 40.4 percent of smartphone sales, an increase of 5.6 percentage points, and in the US, with 38.9 percent of smartphone sales, an increase of 5.2 percentage points year-over-year.

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About Kantar Worldpanel

Kantar Worldpanel is the global expert in shoppers' behavior. Through continuous monitoring, advanced analytics, and tailored solutions, Kantar Worldpanel inspires successful decisions by brand owners, retailers, market analysts, and government organizations globally.

With over 60 years' experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar Worldpanel turns purchase behavior into competitive advantage in markets as diverse as FMCG, impulse products, fashion, baby, telecommunications, and entertainment, among many others.

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