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Rediff.com  » Business » Time to write an obituary for 2G and 2.5G feature phones?

Time to write an obituary for 2G and 2.5G feature phones?

November 23, 2018 23:18 IST

The scales started tilting in favour of smartphones in 2014, when a slew of new, yet vibrant, brands entered the market, with their competitively priced offerings helping smartphones become the indispensable device that it has turned into today.

Given the recent explosion in the mobile industry, smartphones are no longer playing second fiddle to feature phones.

Even as phone makers play catch-up in a bloated market, smartphone shipment has surged to a record high of 43 million units, matching the shipment of feature phones for the first time, reveals recent data from the IDC India.

 

This feat comes after years of accelerated growth that helped smartphones close the gap.

Annual growth rate ranged between 120 per cent (in 2013) and 14 per cent (in 2017) – much higher than the single-digit to low-double digit growth in feature phone shipments.

While in September 2016, the share of smartphones to overall handsets stood at 43 per cent, a year later, it surged to 48 per cent, before touching 50 per cent this year.

The achievement couldn’t have been possible without disruptors like Xiaomi, OnePlus, and Vivo.

According to experts, the scales started tilting in favour of smartphones in 2014, when a slew of new, yet vibrant, brands entered the market, with their competitively priced offerings helping smartphones become the indispensable device that it has turned into today.

Despite a surge in the average selling price of devices - thanks to an expanding base of consumers for premium handsets - brands like Xiaomi helped bring in cutting-edge handsets under the Rs 10,000 price band.

Improved internet connectivity added further momentum.

Consistent efforts by manufacturers and heavy spend on advertisements and promotions have grabbed the requisite eyeballs.

While Vivo has spent Rs 2,200 crore for the title sponsorship right of the Indian Premier League, Oppo has allocated Rs 1,100 crore for the jersey rights of the Indian cricket team.

Upasana Jain, associate research manager, IDC India, said bulk orders from state governments in the wake of the upcoming Assembly elections, increased shipments in September.

Chhattisgarh government, for example, is procuring 5 million smartphones to be distributed among women voters.

Fierce competition among e-commerce players has helped as well. According to the IDC, e-tailers’ relentless efforts to drive sales during the festive season, with attractive discounts and easy financing schemes, supported the last-mile run.

While Amazon offered the top-draw OnePlus device at 14 per cent discount, Flipkart sold Xiaomi, Asus, and Honor devices at lower rates.

Gains are visible for smartphones as well as e-tailers.

Shares of online channels surged to a record 40 per cent in September, from 30 per cent a year ago.

While Xiaomi grew to a new high, shipping 11.7 million units, OnePlus climbed to the leadership board, surpassing Samsung and Apple.

Record number of launches in the run-up to the festive season has also helped.

Since June, over 250 new smartphone models were unveiled, compared to 200 last year.

With major players like Xiaomi, Vivo, Oppo, Realme, Asus, and OnePlus placing their bets solely on smartphones the segment is expected to grow faster than feature phones.

Also, falling sales of 4G feature phones - once expected to give impetus to the feature segment - is a bane for the outdated lot.

“Only Jio is seriously pushing 4G feature phones in the market. But lack of enough serious players is causing trouble for such handsets,” said Jain.

However, it’s still too early to write an obituary for 2G and 2.5G feature phones.

Photograph: Mike Segar/Reuters

Arnab Dutta in New Delhi
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