Friday, February 17, 2017

GADGET SPECIAL.........HANDSET MARKET FORECAST FOR 2017 - Feature Phones May Keep Lead Over Smartphones

HANDSET MARKET FORECAST FOR 2017 - Feature Phones May Keep Lead Over Smartphones


Low-cost 4G feature phones may further stall shift to smartphones: report

Feature phones may continue to rule India's handset market in 2017, replicating the scenario last year, when migration from basic devices to smartphones slowed due to affordability , durability and longer battery life. Lowcost 4G feature phones could further stall the move to smartphones, experts said.
“Feature phones dominated total handset shipments in India in 2016 and we expect this trend to continue in 2017,“ JP Morgan said in a note to clients. “The continued relevance of feature phones makes India stand out as the biggest feature phone market globally (comprising about 30% of total volume).“
It said improved feature phone specifications and the fact that they are typically as much as half the price of good quality , low-end smartphones are among the key barriers preventing upgrades to smartphones.
“With support for mobile banking and 4G capabilities (likely in 2017), feature phones will remain popular in the Indian market even in 2017,“ JP Morgan said.
JP Morgan expects smartphone shipments in the fourth quarter to fall 20-25% sequentially , taking the total for the year to 108 million units, hurt mainly by the invalidation of high-denomination currency notes in November.
It estimates smartphone sales to grow about 15% to 125 million in 2017, led by Chinese handset makers, from an expected 5% growth in 2016, when the market was hit by demonetisation. In contrast, smartphones sales have improved steadily in China and now account for about 90% of the market.
“We believe that total handset sell-in will remain depressed in January and February as chan nel inventories are digested, with normal sell-in likely to resume from March,“ JP Morgan said, adding that the first quarter of the next financial year starting April 1 may still see some impact of demonetisation. “We should start seeing normalcy as we course through 1QCY17 to 2QCY17.“
The brokerage said replacement demand consumer upgrades will drive the bulk of total 2017 smartphone shipments. Besi des, government in centives, faster than-expected rol lout of 4G networks and availability of ultra-low-end 4G upport smartphone devices will support smartphone adoption in India, where they have a 25% market share. A big hurdle to smartphone growth could come in the form of the low-cost 4G feature phone, experts said.
The 4G basic phone category will delay the migration due to the subsidy element and could be disruptive for about a year, said Shubhajit Sen, chief marketing officer of domestic handset maker Micromax Informatics.
Mukesh Ambani-led Reliance Jio Infocomm is said to be working with original equipment makers to launch 4G VoLTE feature phones under the Lyf brand and subsidising part of the selling price to make them available for about Rs 1,000 (about $15), ET reported earlier. Jio hasn't officially disclosed any plans around the 4G feature phone. Lava has already launched India's first 4G VoLTE feature phone at `3,333.
Backed by aggressive marketing spends and investments in brand building, Chinese vendors have been quick to capitalise on the emergence of online channels and migration from 3G to 4G devices in India.
“With competition from China showing no signs of abating, we expect Chinese players to continue to dominate the smartphone market even in 2017. The way ahead for Indian smartphone brands looks challenging since Chinese brands have all already localised their manufacturing in India and are well ahead on R&D and product branding,“ JP Morgan said
Danish Khan
New Delhi:

ET9FEB17

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