Future of Indian smartphone market

dhruvtalksstech
Mar 31, 2023
6 min read

Budget smartphones are incredibly affordable even by the standards of lower-middle-class Indians. We've got to understand that unlike our western counterparts where the median salary is manyfold higher, it's not the case in India. Median and mean salaries in India have gone up folds in the past decades and that presents a wonderful opportunity to own a smartphone for the first time. India has the fastest-growing middle-class population in the world and approximately 500 million people are predicted to enter the middle class in the next 20 years in India alone. These budget phones are not about features and looks. They are about providing people who have always had a feature phone the experience of a smartphone. Thanks to Jio which made India the cheapest telecommunication market in India, over 800 million Indians use a smartphone now.

The smartphone boom in India is impeccable, to say the least. India has gone from being one of the least technologically advanced nations to being one of the most advanced at the civilian level because of the widespread adoption of smartphones in India in the last decade. The smartphone market is evolving and people are upgrading phones more often. Everyone is upgrading their budgets and more and more people are eyeing iPhones because of recent lucrative and enticing deals offered by outlet stores in order to lure in the young generation. At the same time, we are seeing that ultra-cheap phones (under Rs. 8000) are ceasing to exist. Not many are being launched today because the market for such cheap phones is shrinking.

There is still a lot of potential growth. India will soon become the most populous nation on the planet with a staggering population of 1.5 billion. That leaves room for over 500 million smartphones to be sold. People in the budget and mid-range segment also tend to upgrade their phones frequently. All of this and more are poised to make India the world's biggest manufacturer and market for smartphones as developed countries are already experiencing saturation. This paradigm shift is also being witnessed in terms of manufacturing. Apple has shifted its strategy and is realizing the potential for growth in the Indian market. Smartphones have the potential to become the main driver of the Indian economy and modernize it. For far too long, ours has been a medieval economy with incredible riches in certain pockets of the country. Smartphones can create a level playing field and combat the increasing wealth gap in our incredibly capable nation. This is true for technology overall. AI and ML can do the same but this is something which can be discussed in a whole separate blog.

Apple is also pushing the Mac Lineup in India. You can reportedly buy an M1 MacBook Air for about 76K without trading in. This is a steep price drop compared to the 100k you would have had to spent otherwise. Great work, Apple. I can't wait for Apple to open an official outlet store in India. It is reported that Apple plans to open one in India in 2023.

This is why they have been incentivizing people to buy iPhones by introducing EMI options, gift cards, student discounts, plans to open official retail stores, sales on Amazon and Flipkart, and much more. All of this has helped Apple triple its share in the Indian smartphone market. It is being reported that Apple is looking to diversify its manufacturing outside of China and iPhone 14 and 14 Plus will be manufactured in India just 6 weeks after beginning production in China. This would bring down costs, slash taxes and encourage people to buy iPhones. It's a win-win situation. The Pro variants of the iPhone lineup are currently subject to additional import tax since they are not manufactured in India. They are only manufactured in China. We can only hope that the Pro models would be manufactured in India as well would slash at least 20,000Rs ($250) off the price tag.

The incentives provided by the Government are really beneficial for all manufacturers and all of this is because of the vision laid down by our dynamic Prime Minister Narendra Modi.

As the world grows increasingly wary of China's dictatorship, harsh lockdowns, uncertainty due to the US-China trade war, and lowering productivity and increasing costs of labor, India presents itself as a rising star that has a huge workforce to train. States like Tamil Nadu, Kerala, Karnataka, Maharashtra, and Gujarat are havens of foreign investments and a lot of Giga factories are located in these regions. This trend applies to other industries as well such as automobile manufacturing and food processing but we are not here to talk about those right now. As much as I resent the use and sale of Chinese phones, we can't deny that Chinese firms have poured in billions of dollars and added hundreds of billions to the economy. They have also given access to hundreds of millions of people to smartphones. It was the indecision and lethargic attitude of Indian smartphone manufacturers like Lava and Micromax that they did not compete with the Chinese manufacturers.

Even my grandfather uses a Chinese phone - A Realme C20. The phone's 2 years old. This is probably the oldest phone featured on Dhruv Talks Tech and the internet as a whole. Us tech geeks tend to not think about tech that's older than 2 months let alone 2 years. This long-term review is not just about the C20 in particular but about Realme as a whole as compared to other Android brands. I am picking the C20 for this test because my grandfather uses one and I have used it and tested it out. The C20 falls in the category of budget smartphones. My grandfather has the 32GB model which may sound obsolete to all of us but he's old and only uses his phone for calling and messaging through WhatsApp. This specific model is for less than 7,000Rs (90$).

People who have never had a smartphone were open to trying out one and they didn't care about the country of origin as Indo-Sin relations weren't as tense then. Chinese phones also provided better and cutting-edge tech at cheaper prices and that's why they pulled ahead of the curve. While Indian smartphones looked clunky and obsolete, Chinese smartphones had a 6-inch notch OLED display with 3 cameras on the back with an under-display fingerprint scanner. We do face a lot of challenges going forward beginning with infrastructure and lack of training but the government is working swiftly to tackle those challenges.

Indian smartphones have bounced back since then but are still at a nascent and inferior stage. They have got a lot of catching up to do. The smartphone market contributed $80 billion to the Indian economy and that number will exceed $200 billion by the end of the decade. It will create millions of jobs and pull people out of poverty. In the US alone, the mobile economy created 10 million jobs and contributed $340 billion to the world's largest GDP. We've still got to overtake China in terms of smartphone manufacturing, users, internet users, accessibility, and market penetration but we are getting there faster than our predecessors could have ever imagined.

India is home to the world's largest smartphone manufacturing plant in India. It is a Samsung phone factory and it has played a major role in making Noida UP's richest town with a GDP of over $25 billion. The facility is spread over 35 acres and employs over 45,000 people. The facility is built on a state-of-the-art platform and can churn out 120 million phones a year. The most prosperous states in India are the ones that receive the most FDI and have the most manufacturing plants. India produces over 300 million phones a year and has over 200 smartphone factories. All of this tech revolution would also advance the government's India of Digital India and reduce the red tape bureaucracy that has stifled innovation and progress in India for over 6 decades.