Indians bought fewer but more expensive phones during this festive season: Report

Users are buying phones less frequently for a year now, while 5G is pushing up the prices.

Highlights
  • Shipment of phones fell 10 percent annually despite the festive season
  • According to IDC, the average phone price also went up in India
  • 5G phones now account for more than one-third of total shipments

Buyers in India are opting for more expensive phones, although this may not necessarily be a voluntary choice. According to the latest quarterly report for the September quarter by market research firm IDC India, the total shipment of phones fell by 10 percent annually to 43 million units, thus marking the weakest festive season smartphone sales in three years. While the pandemic saw users scramble to buy new phones and other gadgets due to remote work and education mandates, this year’s festive season has seen cost concerns dip overall demand for new smartphones. This, in turn, has also led to an increase in the overall prices.

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How Indians are buying phones right now

According to the IDC report, although shipment of phones fell by 10 percemt during the strongest shipment quarter of the year, the share of 5G phones in total shipments did go up. As per the firm, 36 percent of all smartphones, or 16 million phones, shipped in India between July and September were 5G-enabled — marking this to be the highest share of 5G phones among new phone shipments in a single quarter.

With this, IDC said that India has over 67 million active 5G phones in the country, even though the rollout of 5G services is still at a nascent stage. According to a Mint report, Navkendar Singh, associate vice-president for client devices at IDC said that India could have around 80 million active 5G devices in the country before the end of the year.

In terms of prices, the IDC report highlighted that the average selling price of a smartphone in the country went up from around Rs 14,500 in the festive quarter last year, to Rs 18,500 this year. This marks an increase of around 28 percent annually, due to the lack of availability of sub-Rs 15,000 5G phones.

However, 5G phones, specifically, saw a decline in the overall prices. According to the report, while the average price of a 5G phone in India at the start of 2020 was Rs 39,000, the same has since come down to Rs 32,000 — although this is still more than 70 percent higher than the average selling price of a smartphone in India at the moment.