Mukesh Ambani-owned Reliance Jio grew sharply and replaced Lava as the fifth largest smartphone vendor with huge shipments of 4G devices in the first quarter of 2016, even as the shipments of key Indian vendors Micromax, Intex and Lava put together dropped 20.4% sequentially in the smartphone market, which itself saw a sequential decline of 8.2%, according to IDC.
"The first quarter of the year is usually expected to be slow after the festive season in the last quarter of the year. However, the contraction in Q1 2016 is mainly propelled by the decline in shipments from all the top 5 smartphone vendors of previous quarter," Karthik J, Senior Market Analyst, Client Devices, said in a statement.
Karthik said that Micromax, Intex and Lava struggled to push their inventories into the market, which led to decline in their shipments.
The market research firm said that Jio has started building the VoLTE devices base by shipping its LYF branded smartphones in the channels. Jio shipments are expected to grow in the coming quarters owing to launch of its service offerings.
Samsung maintained its market leadership with 26.6% in the smartphone market, which saw a sequential decline of 8.2%. The firm however saw a dip in shipments for both year-on-year and sequentially (quarter-on-quarter), even as it maintained its leadership. IDC said that over 75% contribution came from its J-series smartphones as they continue to drive volumes for the vendor in both offline and online channels.
Micromax retained second position in Q1 2016 with 6.9 percent growth over the same period last year. However, shipments fell 17.9% sequentially for the second consecutive quarter as volume dipped sharply in the entry level sub-US$75 segment.
Intex regained its third position, although shipments sequentially declined by 10% in Q1 2016 but grew marginally over last year. Intex's 4G shipments almost doubled over the previous quarter strengthening its portfolio with over 15 active LTE models, IDC said.
Lenovo (including Motorola) slipped to fourth position as the shipments declined 35.8% coming off from a sharp spike in the previous quarter. Its sub-$150 segment saw a steep decline in the shipments. However, the vendor is likely to see some recovery with the launch of K4 Note and the next generation Moto G in Q2 2016, IDC said.
"LeEco made its entry in Indian smartphone market in Q1 2016 with its Le1S contributing to majority of the vendor's shipments. Also, key Chinese vendors like Oppo, Xiaomi, Vivo and Coolpad gained traction in the first quarter of the year with new product launches, aggressive marketing spends and expanding their channel presence", adds Karthik.
4G based smartphones shipments clocked 15.4 million units in the quarter, which has grown more than 6 times over the same period last year.
"4G based device shipments accounted for 65.5 percent of overall smartphone shipments in Q1 2016 driven primarily by Samsung's J-series models. This sharp rise in the share of 4G smartphone is due to the cohesive move from the entire ecosystem," Jaipal Singh, Market Analyst, Client Devices, said.
Samsung continues to lead the 4G smartphone market followed by Lenovo and Reliance Jio.
"Qualcomm and Samsung are spearheading this growth while MediaTek along with Chinese and Indian vendors are driving the 4G volume in India. Adding to that, telecom players are playing a pivotal role in setting up the infrastructure and promoting 4G leading to wider awareness of this next gen technology in India," Singh added.
The "Make in India" campaign continued to promote the local manufacturing in India as more than 25 Vendors are now manufacturing smartphones locally in India. More than two-thirds of the smartphones shipped in Q1 2016 were assembled within the country.
Few vendors who are currently assembling mobile phones in India are likely to start manufacturing components like batteries, chargers and data cables owing to encouraging support from central and state governments, IDC said.
IDC expects the smartphone market to gain the momentum in the upcoming quarters.
"This year is expected to unfold many transitional phases in the mobile phone ecosystem as more vendors begin local assembling/manufacturing and an increasing trend for higher data consumption owing to affordable 4G devices and data plans", Navkendar Singh, Senior Research Manager, IDC India, said.
Smartphone penetration is still at less than 30 percent in the country which makes it the one of the most attractive markets in the world. "While the new entrants continue to make the Indian mobile market more competitive, vendors differentiating themselves with value added services could be expected in this year", added Singh.