Jul 30, 2010 (06:07 AM EDT)
India Handset Sales To Rise 18.5%
Read the Original Article at InformationWeek
Mobile device sales in India are projected to increase 18.5% this year to 138.6 million units, up from sales of 117 million units in 2009, according to Gartner. The steady growth is expected to continue through 2014 when end-user sales in India's mobile handset market will exceed 206 million units, Gartner said.
While the already-crowded market was previously dominated by carrier giants like Nokia, Motorola, Reliance, and Vodafone, the addition of new carriers and several additional local mobile device manufacturers has created steep competition, the research firm reported. This has resulted in low calling rates and low-cost devices.
"Established global device manufacturers are losing ground due to fierce competition from local and Chinese manufacturers in the low-cost segment," said Anshul Gupta, principal research analyst at Gartner, in a statement. "Price remains the main criteria when buying any consumer electronic device in India, including a mobile device. Carrier strategies, lower tariffs, and/or third-generation (3G) data plans will continue to shape the mobile device market in India."
Some 10% of worldwide mobile device sales come from India, Gartner reported, and its vast size and open market appeal -- mobile handsets can be sold independent of cellular service -- has been an impetus for more global mobile device manufacturers to enter the market. Currently more than 50 brands are available in India, in addition to brands on the black market, Gartner said.
"The entry of Indian mobile handset players focusing on low-end, value-conscious consumers has intensified competition in the Indian mobile device market,'' said Gupta. "A large volume of mobile device sales in India come from the low-end device segment." On average, mobile devices cost approximately $52, he said, and 85% of devices sold cost below $100.
India's cellular market is more focused on voice than data, with only 10% of carrier revenue generated by data services, Gartner said. Short message service comprises 85% of revenue and 2% comes from data access on mobile devices. Approximately 95% of existing subscribers are on prepaid plans, and 98% of new subscribers also opt for the prepaid model. "This all corroborates the fact that the Indian mobile device market is driven by the lowest call rates in the world and dominated by low-cost devices, which account for 80% of overall sales in India in 2010," Gartner noted.
Sales of 3G devices are expected to comprise 16.7% of total sales in 2010, up from 9.2% in 2009, even though 3G technology is not yet available in India, the firm said, and will account for 69% of total sales by 2014.