India’s ultra-premium smartphone market witnessing intensified competition | 60-80% of the growth is driven by Apple

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The Ultra-premium smartphone segment is witnessing intensified competition with established players Apple, Samsung, and OnePlus all going at it toe to toe with new entrants such as Vivo for a greater share of consumer wallets in the festive season.

The segment is priced at over $700 or 52,000 INR is expected to surge 60-80% on-year in 2021 on pent-up demand, market trackers said, as consumers who did not upgrade their smartphone in 2020 due to the COVID-19 pandemic queue up to buy expensive devices.

“The significant growth in these segments can be attributed to increased consumer spending on luxury/costly product segments, re-allocating spends from holidays, shopping, travel, dine out, etc. We expect this momentum to only grow further in the upcoming festive season, driven by upgraders within the premium and from the $500-$700 segment,” Navkendar Singh, Research Director at Market Insights firm IDC, stated.

4RABET

Counterpoint Research has forecast that Apple, Samsung, OnePlus, and Vivo will drive the ultra-premium market, which is expected to witness more than 60% on-year growth in 2021.

Prachir Singh, Senior Research Analyst at Counterpoint said, “Competition will be very high in this segment, with Apple likely to corner the lion’s share of around 40% in Q3. We have seen high shipments of iPhone 11 and iPhone 12 in August, and it will continue coupled with the iPhone 13 Series.”

Handset BrandsQ2 2021
Apple49%
Samsung32%
OnePlus9%
Vivo 4%
Others5%
Source: Counterpoint Research

“Almost 97% of the Indian market is under $500. However, there is a strong uptake in the $700-$1,000 price segment over the past few quarters,” Singh said.

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The $700+ segment has gone up from 1% share in 2019 to 2.3% in 2021, he added.

Due to supply constraints impacting the entire mobile phone ecosystem, premium players have attempted to push inadequate stocks, including older models, ahead of the festive season, market trackers said.

They are also offering upfront discounts and cashback besides financing schemes and trade-in programs to attract buyers.

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The premium segment, over 30,000 INR contributes 7% by volumes, but 23% by value in the overall smartphone space.

Apple iPhone 13 can now be pre-ordered via Amazon India and you can get a flat ₹6,000 discount

Samsung’s market share in the segment is also expected to grow due to the launch of its foldable Galaxy Z Series, which includes the Z Flip3 and Z Fold3.

A person with knowledge of Samsung’s sales trends said the total sales of Z Fold3 and Z Flip3 in India are trending higher than its Note 20 Series.

The person added, “By the end of the festive season this year, Z Series devices will surpass Note 20 Sales in India. Dealers and retailers across several states are stocked out and waiting for more supplies of the Galaxy Z Series. Nearly 60% of Indian consumers have gone for the pricier Galaxy Z Fold3.”

Vivo India, which recently launched its premium X70 Series, wants to be player in all price segments, Nipun Matya, Director, Marketing Strategy has said.

You can get up to ₹7,000 discount when you order Samsung Galaxy Z Fold3 or Flip3 5G

“In the last 12-18 months, in offline space, we have been no.1 both in volume and value. Customers have given feedback that they want premium products from Vivo. In 2-4 years, the premium segment will continue to grow as customers are upgrading with rising income. Customers are willing to pay a premium for meaningful innovation,” Marya added.

In two to four years, the premium segment will continue to grow as rising incomes will ensure that consumers are willing to pay a top-notch price for top-quality devices with meaningful innovation and upgrade their phones, he added.

“It is great timing by Vivo to launch its X70 Series since the IPL is ongoing,” said Counterpoint’s Singh.

OnePlus India, which entered into the ultra-premium segment in 2019 with the 7 pro and 7T Pro, has cornered a 32% share in the ultra-premium segment in the second quarter.

A company spokesperson said, “This year, we closed our second quarter with our strongest ever product line-up backed by a strong performance of the OnePlus 9 Series. We continue to play a pivotal role in the success of the premium smartphone segment in India.”

IDC’s Singh said that OnePlus has witnessed a massive surge with the OnePlus 9 Pro shipments as there is a middling demand in the past quarters.

The entry and strong performance of brands like Vivo, Xiaomi, and Oppo have increased competition in the overall premium smartphone segment which grew 122% on-year in the second quarter, capturing 7% of the overall market, according to Counterpoint.

The research firm expects the segment to grow 54% on-year in 2021 or a 7% share in the overall market.

Singh said, “Apple, OnePlus, Vivo, Xiaomi, and Samsung are expected to drive the premium smartphone market.”

A spokesperson for Xiaomi India said the company had a 14% share of the overall premium market in the second quarter.

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