India has ousted the U.S. to become the world's second largest smartphone market after China, according to a new market research report on Thursday.

Figures aggregated by industry analyst Canalys show smartphone shipments in India in the third quarter of this year rose above 40 million units for the first time, representing 23 percent annual growth.

india pr graph 003

"This growth comes as a relief to the smartphone industry. Doubts about India’s market potential are clearly dispelled by this result," said Canalys Research Analyst Ishan Dutt. "There are close to 100 mobile device brands sold in India, with more vendors arriving every quarter. In addition, India has one of the most complex channel landscapes, but with low barriers to entry. Growth will continue. Low smartphone penetration and the explosion of LTE are the main drivers."

Samsung and Xiaomi, which shipped 9.4 million and 9.2 million units respectively, accounted for almost half of the total market, with Xiaomi expected to overtake Samsung if things continue. Meanwhile, Chinese trio Vivo, Oppo, and Lenovo also posted strong sales in Q3 2017.

Apple's sales, which were too low to make the chart, still indicated impressive growth, with iPhone shipments more than doubling to 900,000 units compared to Q3 2016. However, the relatively high price of iPhones has so far meant smaller adoption rates despite the introduction of lower-priced devices and discounted older models.

It's also worth considering that Apple only began local production in India earlier this year, while the Indian government has been mulling tax and policy exemptions sought by Apple for setting up more facilities to assemble iPhones.

Apple currently assembles iPhones at plants run by supplier Wistron, thereby satisfying India's requirement that 30 percent of products sold by foreign companies be manufactured or produced within the country. Apple also wants to open its first physical retail store in India as early as 2018, and the company is reportedly looking to open four to five flagship-class stores in the country over the next five to ten years.

Meanwhile, China remains the biggest smartphone market by some margin, with more than 110 million shipments per quarter.

Tag: India

Top Rated Comments

Ramchi Avatar
71 months ago
If they even, just price their products same as in the US. I think, they have a deal.

iPhone X in US: $999
iPhone 8 (Regular) in India: $980
For that Apple has to make the iPhones in India for which Apple negotiating certain concessions(it might eventually happen when Apple builds the capability in India manufacturing iPhones, right now Apple manufacturers low end iPhone 5C in India but later they might start making the latest models as well). Apple product still worth $1000(iPhone X 64 GB) for Apple whereas taxes and duties levied for getting it imported (for Indian market) added to the price tag so much. Even in US various State Taxes the price will be slightly higher (may be between 5%-10%). Excise duty may be the biggest differentiator.
[doublepost=1509107645][/doublepost]
The ASP in India is fairly meaningless to Apple though. Apple doesn't have a unit that sells for less than $350 in India. Where that ASP does mean something is how that average is reached. There are a ton of phones in India that sell for less than $100. There has to be a fair amount of phones above that threshold to raise the ASP to $135. That's where Apple is concentrating.
The problem for Apple in India is retailing and carriers subsidy. Once they work out a proper acceptable revenue sharing methods, they can match US prices and possibly reach over many millions. No one with right mindset would part away so much for electronics in India who are very smart in evaluating costing of products based on its functionality, resale,utility and depreciation etc..

Even in US Apple popularity was initially increased along with career subsidy. Not many in US would pay annual ransom for an electronic good. They are far smarter than than rest of the world, hence Apple adopted that strategy initially. Now they locked the most in the ecosystem, they slowly start demanding upfront payment for the most part or whole device at retail price.
Score: 4 Votes (Like | Disagree)
69Mustang Avatar
71 months ago
Provides some perspective doesn't it? Should help some understand why Tim has been desperate to penetrate India's market.
Score: 4 Votes (Like | Disagree)
GrumpyMom Avatar
71 months ago
Apple does need to make its retail stores happen in India. We’ve had way too many MacRumors forum members from India sharing their service horror stories over the years when they try to get things fixed or issues addressed through resellers. It’s not that the resellers are bad, either. I’ve read some resellers attempting to provide extraordinary customer service. But their hands are tied, at times. So many of the complaints that MR readers tried to help with would have been so easily settled if the Indian customer could have had an Apple Store to go to for help.

I’ve got good friends from India and the picture I get from them of India is that it is a very promising market for Apple. But Apple sells not just phones but it’s whole ecosystem and service quality to justify its prices and reputation, and for that they need to definitely be more present in India. Hopefully India’s government will let that happen.
Score: 4 Votes (Like | Disagree)
Ramchi Avatar
71 months ago
Are there many apps in the native language(s)?

This seems almost like a Windows Phone situation.
iOS adoption is good with lots of native linguistics apps (but in India people generally accept English Apps but for rural areas are still behind in terms of acceptance of English as the main written and spoken language). There are way too many languages in India but right now Apple is successful in providing linguistic support major ones.

Right now more people buy iPhone in the resale market.
Score: 4 Votes (Like | Disagree)
827538 Avatar
71 months ago
Still not the second most important when most of the phones being sold are extremely low profit budget devices. The US and China are still by far more important.
Would be more interesting to see the capital expenditure of phones by country.
Score: 3 Votes (Like | Disagree)
Michael Scrip Avatar
71 months ago
Provides some perspective doesn't it? Should help some understand why Tim has been desperate to penetrate India's market.
Absolutely. India's 1.3 billion people would get any CEO excited!

However... the average selling price of a smartphone in India is around $135

But because of India's massive population... there are still a lot of people who can afford an Apple phone.

I'm interested to see how it all plays out for Tim and Apple!
Score: 1 Votes (Like | Disagree)

Popular Stories

iOS 16

iOS 16.4 for iPhone Nearing Launch With These 5 New Features

Monday March 20, 2023 11:50 am PDT by
Apple says iOS 16.4 is coming in the spring, which began this week. In his Sunday newsletter, Bloomberg's Mark Gurman said the update should be released "in the next three weeks or so," meaning a public release is likely in late March or early April. iOS 16.4 remains in beta testing and introduces a handful of new features and changes for the iPhone. Below, we have recapped five new features ...
iPhone 15 Pro Buttons CAD Leak

iPhone 15 Pro Leak Reveals Unified Volume Button and Mute Button

Monday March 20, 2023 8:33 am PDT by
As previously rumored, the next-generation iPhone 15 Pro and iPhone 15 Pro Max will feature a unified volume button and a mute button, according to leaked CAD images shared in a video on the Chinese version of TikTok and posted to Twitter by ShrimpApplePro. Instead of separate buttons for volume up and volume down, the iPhone 15 Pro models are expected to have a single elongated button for...
voice isolation

iOS 16.4 Adds Voice Isolation for Cellular Phone Calls

Tuesday March 21, 2023 11:01 am PDT by
The iOS 16.4 update that is set to be released to the public in the near future includes voice isolation for cellular calls, according to notes that Apple shared today. Apple says that Voice Isolation will prioritize your voice and block out the ambient noise around you, making for clearer phone calls where you can better hear the person you're chatting with and vice versa. Voice...
airpodsd 3 purple 4

iOS 16.4 Seemingly References New AirPods and AirPods Case

Tuesday March 21, 2023 11:43 am PDT by
The iOS 16.4 release candidate version that was provided to developers today appears to hint at a new set of AirPods that could be coming in the near future. According to @aaronp613, the beta features references to AirPods that have a model number of A3048 and an AirPods case with a model number of A2968. There have been no rumors that new AirPods are on the horizon, and it is early for...
maxresdefault

Nothing Launches $149 Ear (2) Wireless Earbuds to Compete With AirPods Pro 2

Wednesday March 22, 2023 9:48 am PDT by
Nothing today announced the launch of its second-generation wireless earbuds, the Nothing Ear (2), which offer many of the same features as Apple's AirPods Pro 2 at a lower price point. We went hands-on with the Ear (2) earbuds to see whether they're a viable alternative to the AirPods Pro 2 for those who want to save some cash. The Ear (2) earbuds are the successor to the Nothing Ear (1),...
iOS 16

Apple Seeds Release Candidate Versions of iOS 16.4 and iPadOS 16.4 to Developers [Update: Public RC Available]

Tuesday March 21, 2023 10:25 am PDT by
Apple today seeded the release candidate versions of upcoming iOS 16.4 and iPadOS 16.4 updates to developers for testing purposes, with the software coming a week after the launch of the fourth betas. The RCs mark the final version of the software that will be provided to the public in the near future. Registered developers are able to download the iOS 16.4 and iPadOS 16.4 updates...
apple park at night 1

Apple 'Tracking Employee Attendance' in Crackdown on Remote Working

Thursday March 23, 2023 3:41 am PDT by
Apple is tracking the attendance of its employees at offices using badge records in order to ensure they are coming in at least three times a week, according to Platformer's Zoë Schiffer. Since April 2022, Apple employees have been operating on a hybrid home/office work policy as part of a gradual return strategy following the pandemic, with staff required to work from the office at least...
iphone 14 pro max deep purple feature purple

iPhone 15 Pro Rumor Recap: 10 New Features and Changes to Expect

Thursday March 23, 2023 6:42 am PDT by
While the iPhone 15 series is still around six months away from launching, there have already been plenty of rumors about the devices. Many new features and changes have been rumored for the iPhone 15 Pro and iPhone 15 Pro Max in particular. Below, we have recapped 10 changes rumored for iPhone 15 Pro models that are not expected to be available on the standard iPhone 15 and iPhone 15 Plus:A1...