India becomes the second largest smartphone market in the world

India is now ranked as the second largest smartphone market in the world, overtaking the United States, according to a new report from Canalys.

Smartphone shipments in India reached almost 40 million in the third quarter of 2017, a growth of 23 percent year-over-year, as per the report. The market is dominated by five key brands, including Samsung, Xiaomi, Vivo, Oppo and Lenovo with the first two accounting for 46.5 percent of shipments. This comes as good news for mid-range to entry-level smartphones. Apart from the top five, there are dozens of local brands available in the market, offering customers budget-friendly Android devices with LTE capabilities.

Canalys Research Analyst Ishan Dutt said,

“This growth comes as a relief to the smartphone industry. Doubts about India’s market potential are clearly dispelled by this result."

As it can be seen from the graph above, Samsung accounted for 9.4 million shipments in the third quarter of 2017, a 30 percent increase year-over-year. On the other hand, Xiaomi is close to Samsung with 9.2 million units, growing a surprising 290 percent compared to the same quarter in 2016. Xiaomi is focusing more on entry-level and mid-range handsets, with prices ranging from ₹15,000 to ₹20,000, which is one of the reasons why customers are opting for its devices.

Canalys Analyst Rushabh Doshi said in the report,

“Xiaomi’s growth is a clear example of how a successful online brand can effectively enter the offline market while maintaining low overheads. But Xiaomi focuses on the low end. It struggles in the mid-range (devices priced between INR15,000 and INR20,000 [US$230 and US$310]), where Samsung, Oppo and Vivo are particularly strong. Nevertheless, we predict Xiaomi’s continued go-to-market innovations will allow it to overtake Samsung within a couple of quarters.”

Apple is missing from the list of top five, but the company has doubled iPhone shipments to 900,000 in the third quarter of 2017. The low adoption rate is mainly due to the device's high price tag, especially in a market where customers prefer budget-friendly devices.

Can the United States reclaim the second spot in the near future? Share your thoughts in the comments below!

Source: Canalys via TechCrunch | Image credit: Canalys