Samsung‘s leadership position in Indian smartphone market threatened

May 19, 2017, 09:06 am

By AsiaToday reporter Bae Ji-yoon

Samsung Electronics' leading position in the smartphone market in India is being threatened as other global manufacturers are setting up local production. It's because local production by Apple and other Chinese manufacturers could bring the price of their devices down in the Indian market, where entry-level smartphones are mainly sold.

According to The Wall Street Journal and other foreign sources on Wednesday, Apple has officially started manufacturing its low-end smartphone iPhone SE in India. Along with Apple, Chinese smartphone makers like Oppo, Vivo, and Huawei are reportedly considering to construct plants in India for local production, raising concerns about Samsung's presence.

Samsung continues to maintain its leading position in Indian market with a market share of around 25%. On the other hand, top global smartphone brand Apple is having a tough time gaining ground in the country with its single-digit market share. This is because entry-level smartphones are strong in the market, leaving little space for expensive iPhones.

However, the industry prospects that Apple will be able to focus on securing its market share in India when it starts local production this month. It's because smartphones that are imported to India are levied 12.5% and Apple it could receive customs benefit, making it relatively easier to adjust prices.

In addition, India has insisted that Apple, like any single-brand retailer, source 30% of its components locally. Therefore, it is inevitable to manufacture smartphones locally in order to open retail stores. As a result, Apple's Taiwanese manufacturing partner Wistron set up a plant in Bangalore to manufacture or assemble iPhones.

Chinese companies are also turning their eyes to the Indian market. Oppo is planning to invest $217 to set up a manufacturing unit in Noida, India, to produce up to 100 million smartphone units. Last year, Huawei started producing local smartphones in partnership with Flex India.

According to Strategy Analytics, Chinese manufacturer Huawei ranked second with 3.8 million units (14%) of smartphones shipped in the first quarter. Vivo shipped 1.9 million smartphones in the first quarter in the Indian market, ranking 5th with 7% market share. Both companies have grown 322% over the same period in the previous year.

Smartphone makers' such move is due to the growth potential of the Indian market, where smartphone shipments are increasing by about 18% each year. "I view India as where China was maybe seven to ten years ago, and I view there's a really great opportunity there," Apple CEO Tim Cook said.

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