India Is the Main Focus for Growth Opportunity
Since mature markets are saturated, the focus for many vendors is on India and China. “India has the highest growth potential,” said Annette Zimmermann, research director at Gartner. “Sales of feature phones totaled 167 million units in 2015, 61 percent of total mobile phone sales in India.”
Smartphones are expensive for users in India, but with the average selling prices (ASPs) of low-end models falling, Gartner estimates that 139 million smartphones will be sold in India in 2016, growing 29.5 percent year over year. ASPs of mobile phones in India remain under $70, and smartphones under $120 will continue to contribute around 50 percent of overall smartphone sales in 2016.
After recording growth of 16 percent in 2014, sales of smartphones in China were flat in 2015. “In this saturated yet highly competitive smartphone market, there is little growth expected in China in the next five years,” said Ms. Zimmermann. Sales of smartphones in China represented 95 percent of total mobile phone sales in 2015. Similar to India, falling ASPs for smartphones will make them more affordable for users.”
“The worldwide smartphone market remains complex and competitive for all mobile phone vendors, and we are not expecting the vendor landscape to get smaller,” said Ms. Zimmermann. “In such a fluid vendor landscape, some will exit the market while newcomers, including mobile manufacturers or internet service providers from China and India, could make their debut.”
Gartner forecasts that by 2018, at least one nontraditional phone maker will be among the top five smartphone brands in China. “Chinese internet companies are increasingly investing in mobile device hardware development, platforms and distribution as they aim to grow their user bases and increase user loyalty and engagement,” concluded Ms. Zimmermann.
