The Dawn Of Power Packed Machines

For the Indian smartphone industry, 2018 turned out to be an interesting year with manufacturers coming up with exciting features and innovation to compete with other players. Even shipment volumes touched new heights with 43 million smartphone shipped in Q3 2018 alone and online share reached an all-time high with 39 percent of the chunk in same quarter.

Upasana Joshi, Associate Research Manager with research firm IDC believes that India will continue to attract new players every quarter owing to its vast untapped potential and will continue to grow in the coming few years.

The year 2017 ended on a happy note for smartphone industry with an annual increase of 14 per cent in shipment volumes with a total of 124 million smartphones shipped across the country, which makes India the world’s fastest growing smartphone market. In 2019, Indian smartphone market is expected to continue its double digit growth and according research firm techARC’s estimates, as many of 149 million smartphones are expected to be sold in India this year.

IDC reports that more than 80 per cent of Indian handset market still lies below $200 (approx. Rs 14,000), which is expected to drive this market in 2019 as well. However, there is a pool of upgraders, too, that will drive the $300-$500 (approx. Rs 21,000 to Rs 35,000) segment and attract new players with technological advancements in the affordable flagship segment.

“The premium segment is growing at a fast pace in India, which is faster than other markets. As a lot of existing users are now craving for the premium experience so this segment will continue to grow,” says Vikas Agarwal, General Manager, OnePlus India. “Going forward, premium segment might became more competitive as other players are also pouring into this segment, which are attracting a lot of new users to the premium segment,” he adds.  

Joshi explains that 2019 will be crucial for this market as online heavy brands enter into the offline channel, which still accounts for 60 percent of the total volumes. IDC also hopes for segment of handsets below Rs 5,000, which could fit in with first time buyers of smartphones, many of whom will shift from a feature phone to a smartphone.

Recently, the Indian government made some changes in e-commerce policy where brands can clear only 25 percent of their inventory via online sales. This means online heavy brands such as Xiaomi, OnePlus Realme, Asus and Huawei will have to immediately find out ways to balance their online and offline sales. “The new policy could also work in favour of offline heavy brand like Samsung for the initial quarter or so, till the online centric brands find out a workaround to keep the sales on. However, what is primarily getting affected is the discount driven induced demand, which as per our estimates is 35 per cent of the total online selling,” says, Faisal Kawoosa, Principal Analyst of techARC. Brands such as OnePlus, Xiaomi, Huawei and Motorola have already been aggressively expanding their offline presence since last year across India, which could help them in getting back on track after new policy strikes.

According to research firm Counterpoint, Tecno (owned by Transsion) was the fastest growing smartphone brand in India during 2018 growing by 221% as it expanded its offline reach, Transsion's another subsidary Infinix grew by 146 percent during last year. Arijeet Talapatra, CEO, Transsion India, said, "The 7-15K category will deliver maximum contribution in 2019, thus making it the segment that smartphone players will place their bets on. In 2019, AI-enabled cameras will take the driver's seat in India’s vibrant market - a market that is amplifying its focus towards improving smartphone camera technology." 

Kawoosa asserts that Indian consumers will now witness the third era of smartphone industry. First was the ‘Establishment’, when new players were attempting to build a base between 2008 and 2010; second was ‘Expansion’, when players attempted to get into different segments like low tier, mid-range and premium, etc., and now the third generation will be all about ‘Innovation’, where brands need to showcase new specifications and features based on strong R&D, which will compel users to switch to a newer smartphone. This means, R&D will be the key for smartphone brands to keep the momentum going.

Here, leading analysts in the smartphone sector explain the upcoming trends:

Display: Last year, brands fought aggressively to provide best screen-to-body ratio to the users, some replicated Apple’s notch and ‘the notch’ is today visible from affordable to premium smartphones. However, a few brands such as Vivo (with Vivo Nex), Oppo (Oppo Find X) came up with innovative designs. This year too, brands will focus on reducing the bezel size for making an all-screen phone but some brands have already showcased their innovation prowess. Chinese smartphone maker Vivo unveiled Vivo Nex Dual Display, a handset with two screens -- a 6.39-inch front display and a 5.49-inch additional screen at the phone’s back.  The dual-display provides greater flexibility in using the rear cameras. One can simply use the main cameras along with the rear screen for snapping high quality selfies.  

Another design that has been doing rounds over the Internet shows smartphones with camera holes on the screen. Samsung is expected to bring this display design in their upcoming flagship Galaxy S10 while Huawei sub-brand Honor has already unveiled Honor View 20 that comes with punch hole display.

Foldable Display: Samsung has been working on a bendable OLED from a long time now and this year, the Korean tech giant is said to unveil a phone with foldable display, which could have a size of a tab but would also fit inside our pockets easily. Similarly, Chinese brand Huawei has also announced that they are working on foldable phones ,which are expected to be launched in 2019. However, Joshi is of the view that foldable displays will be limited to flagship devices. “The clear use cases of such screens are yet to be understood and manufacturing them is also a hurdle owing to technical challenges and supply constraints,” she says.

“With the mobile industry’s innovation drive sprouting, we expect enhanced AI, foldable screens and 5G to dominate the industry next year,” says Pan Yin Long, Country Manager, Huawei Consumer Business Group. Long says Huawei is working on foldable phones with 5G connectivity and  are expected to launch this year.

5G: The groundwork for 5G has already been laid in several countries. OnePlus, Samsung, Oppo and Huawei have already announced to bring 5G-enabled handsets in the market during 2019. However, users of upcoming 5G phones won’t be able to get hold of this ultra-fast speed as 5G technology isn’t expected to be rolled out by telecom companies in India this year. “From  the network perspective, 5G will require a whole lot of customisation and we are happy to share that we will be the first brand to launch the 5G smartphone,” says Agarwal.  

On bringing 5G enabled handsets by 2019, Will Yang, Brand Director, Oppo India, says, “With the growing trend of 5G in the telecom industry, several smartphone manufacturers will be launching 5G enabled smartphones in the coming year and OPPO aims to be one of the first to do so in the Indian market.” Nipun Marya, Director, Brand Strategy, Vivo India too confirms that they are 5G ready to enable this transformation.

5G will be initially limited to premium devices for some years. The overall cost of 5G devices is expected to be $150-$200 (Rs 10,500-Rs 14,000) costlier than the predecessors restricting it to $500 (Rs 35,000) and above segment, adds Joshi.

Camera: In 2018, dual rear cameras were available in almost every smartphone across different segments. Huawei came up with three rear cameras last year with P20 Pro in first half of 2018 and then with Mate 20 Pro in the second. Samsung, too, followed this trend and launched Galaxy A7 with triple rear camera setup but that wasn’t enough; later they launched Galaxy A9 with four rear cameras.

Nokia has gone one step further in this segment and is expected to launch Nokia 9 with five rear cameras this year. “We might see a few flagship launches in 2019 with 3D camera set up for the back camera, which will help create use cases in AR on phone for gaming, shopping etc.,” says Joshi.

AI: AI was one of the main talking point in smartphones during 2018 which was especially used in photography for scene recognition and other effects. “In 2019, we can expect to see it going beyond camera and battery”, which means we will be seeing increased usage of AI in smartphones,” says Kawoosa.

“The industry is going to follow the usual trend of new features/specs getting introduced in the luxe (above Rs 50,000) and premium (Rs 25,000-50,000) segments and the present features in these segments moving to lower tiers.  Essentially, the new features are likely to be in luxe and premium segments and we might not see great technological shift in the entry to mid-level of Smartphones, other than some of the features that could get in these. For instance, 3 cameras, fast charging, etc. We have already seen notch in the lower tiers,” added Kawoosa.