Affordable data causes sales of smartphones, wearables to boom in India

[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text css=”.vc_custom_1678534498405{margin-right: 16px !important;margin-left: 16px !important;border-right-width: 10px !important;border-left-width: 10px !important;}”]The Indian telecom market experienced a 36% increase in offline retail value growth in the past year. Offline retail associated with telecom includes smartphones, wearable devices, tablets, and other devices that operate via a telecom network. The primary reason for this growth can be attributed to the fact that the cost of data in India is one of the world’s lowest. With India’s large population, the low cost of data has led to a higher percentage of people now using data on their mobile devices.

According to the market intelligence firm GfK, the global telecom market experienced a 9.7 percent drop in revenue in 2022 compared to the previous year. However, India was among the few bright spots in the industry. India is also one of the fastest-growing telecom markets in the world.

India witnessed a significant increase in revenue in 2022 compared to the previous year, with double-digit growth in categories such as smartphones, core wearables, and TWS mobile headsets, according to Kartik Vasudevan, a GfK expert for the Telecom market.

Metropolitan and Tier-1 cities still command a lion’s share of the market, but smaller towns and cities are also seeing a surge in demand for smartphones, thanks to the availability of data at an affordable price. This has led to these smaller cities contributing to 50% of total smartphone sales in 2022 and 21% of wearable sales.

Analysts predict that the future growth of the telecom market will be fueled by high-end smartphones, the implementation of 5G technology, and the rising popularity of wearable devices. In particular, the demand for high-end smartphones is expected to play a significant role in driving this growth.

What has been aiding the value growth is the higher price point of devices with each passing year. The ASP (Average Selling Price) of smartphones rose to Rs 17,032 in 2022, indicating a 17% growth over 2021. Nearly 37% of the smartphones sold in India in 2022 were sold at a price point of Rs 15,000 or higher.

The introduction of smartphones enabled with 5G technology has also been a trigger for growth. The total revenue contribution from 5G models moved to 44% in 2022. At the same time, devices with storage capacities above 256 GB grew by 122% in revenue.

Another segment that is fast gaining customer traction is wearable devices. These include watches and/or health monitoring devices that many health-conscious customers are using to monitor various activities and parameters throughout the day. The wearables segment witnessed growth of 127% in value terms in 2022.

While 5G has been rolled out in a few select cities as of now, the penetration of 5G to a larger customer base could see further growth in this market in the coming years. Also, with innovation in wearables, one could see newer categories or advanced features being added, which would be in high demand and could also expand this market further.

 

ABOUT THE AUTHOR

Ketan Sonalkar (SEBI Rgn No INA000011255 )

Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.

Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice

You may also like: Adani Group stocks with strong fundamentals bounce from lows[/vc_column_text][/vc_column][/vc_row]