India: Now The World’s Fastest Growing Market For Smartphones?
Xiaomi recently revealed that it is opening up a smartphone factory in Andhra Pradesh in India. This latest move by the biggest smartphone maker in China only reinforces the idea that India is now the future battleground for the global smartphone wars. Several industry watchers are definitely starting to anoint India as the new fastest growing smartphone market after recent estimates show that China, the previous title holder, is now experiencing slowing sales.
One of these industry analysts is Gartner. As reported by this analyst firm, global sales of smartphones have topped 336 million units, a 19.3 percent increase during the first quarter of this year. Gartner’s findings indicated that the fastest growing regions were in Asia Pacific, Eastern Europe, the Middle East, and North Africa, with a 40 increase in sales during the first quarter of 2015. The region with the most potential is India, which also happens to be the second most populous country in the world.
According to a report by IDC, India displayed the fastest growth among smartphone markets during the third quarter of last year. And another research firm, Strategy Analytics, predicts that by 2017, India will surpass the United States as the second biggest smartphone market in the world (behind China, of course).
Speaking of China, this region has already reached a 95 percent smartphone penetration, which means that virtually everybody living in China already owns a smartphone and probably will not be buying one for some time. But in India, the smartphone penetration is just at about 30 percent, which means that there are still plenty of people that will be purchasing their own handset.
With India becoming the next big smartphone battlefield, it makes sense for Xiaomi to establish a presence there, and to do it as early as possible. Despite the Chinese phone maker’s ambitions for expansion in the Indian subcontinent, it will not be easy. To date, the company is only fifth in market share in the region, far behind overall leader Samsung and the homegrown leader, Micromax.
Xiaomi will likely go after Micromax first, which is considered a borderline top ten smartphone maker in the world, manufacturing between 700,000 to a million smartphones every month for Indian customers as well as Russian mobile users. In order to compete, Xiaomi will need to get the ball rolling.
The first smartphone that Xiaomi will be manufacturing in India will be the Redmi 2 Prime, which is an improved version of the phone maker’s entry level Redmi 2 handset. This device retails for about $110, and comes equipped with a 4.7 inch HD display screen, and a Qualcomm Snapdragon 410 64 bit chip.