overtakes in India, what lies ahead for smartphone maker

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Xiaomi is still in the lead when it comes to sales in India. However, has slipped in the sales rankings with moving into second place.

This is important news for Vivo with the number of overall smartphone users now at around 502.2 million. The market is only likely to grow as smartphones have become a must-have in India. In gaming alone, it’s thought that there will be around 370 million smartphone users by 2022. PUGB tournaments are huge with competitors and sponsors and online game providers like NetEnt optimise their games for use on mobile devices, to provide a better user experience. In this positive smartphone environment, gaining second place in the market is good news for Vivo.

Vivo smartphone leading in the mid-premium segment

In addition to having 18.8% of the overall smartphone market in India, Vivo also has the best selling model in the mid-premium segment ($300-500).

Sales of the Vivo V15 Pro account for 28% of this sector of the market. These sales are a big part of the reason that Vivo has made such big gains in the overall market.

The threat to sub-Rs 5,000 smartphones

As companies like Vivo become stronger in the mid and upper range of the smartphone market, there is an ongoing threat to the sale of smartphones in the sub-Rs 5,000 range. It’s possible that Xiaomi and other big brands will move away from selling devices in this price range. There are three main reasons why this could happen:

  • Lack of space in the market at entry-level.
  • Lack of demand for smartphones at this price.
  • Rising costs associated with distribution.

This threat comes at a time when the average selling price of smartphones in India is on the rise. It’s expected to reach $170 (Rs 12,000) in 2020. This is in comparison with the average selling price of $160 in 2019. Despite the increase, this average price is less than the average selling price for smartphones globally which currently stands at $282 and is expected to rise to $317 in 2021.

The future of the Indian smartphone market

It’s unclear what the future holds for the smartphone market in India. Vivo will face increased competition in the mid-premium market as overall market leader Xiaomi looks set to move towards providing more higher priced models.

This is even more likely to happen if the entry-level end of the market shrinks or even ceases to exist. The big factor that could make this less likely to happen is providers offering packages with lower-priced phones. If this happens, demand at this end of the market could start to increase again.

There are too many variables in place to accurately predict precisely what will happen in the Indian smartphone market in the future. Currently, the market is experiencing growth and Vivo is one company that seems to be finding this growth especially beneficial.

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