Over 50 crore Indians are now using smartphones, a 15 per cent increase from 2018 primarily due to brands like Xiaomi and Realme which continue to bring new users to the ecosystem, a new report said on Thursday.
According to market research firm techARC, India had 502.2 million smartphone users as of December 2019, which means over 77 per cent of Indians are now accessing wireless broadband through smartphones.
Samsung with 34 per cent led the smartphone installed base in the calendar year 2019, followed by Xiaomi at 20 per cent, Vivo at 11 per cent and OPPO at 9 per cent, respectively.
"After a slow migration rate from feature phones to smartphones for a couple of years, it's good to see that the market has started to expand again," Faisal Kawoosa, Founder and Chief Analyst, techARC said in a statement.
Although the market does have options in the entry segment (sub-Rs 5,000) for smartphones, users prefer to start their smartphone journey with the basic segment (Rs 5,001 to Rs 10,000).
Realme, Vivo and OnePlus led smartphone brands in terms of percentage net addition to the user base in 2019.
Realme increased its user base by 49 per cent, Vivo 44 per cent and OnePlus by 41 per cent.
Other major brands including Samsung, Xiaomi and OPPO added 9 per cent, 25 per cent and 36 per cent, respectively to their user base in 2019.
"Factors like availability of good-quality affordable smartphones, expansion of online as well as offline channels, expansion of 4G/LTE networks by the operators are among the key reasons driving the smartphone user growth," said Kawoosa.
However, it's going to be challenging hereon as the market is saturating in terms of addressable market, he added.
The next goal for smartphone brands should be to ramp up services where they could consistently generate revenue from the existing customers.
At present, smartphone brands are able to generate $0.5-$1.5 a month from users depending on what all the services they offer, including advertising.
"Even if a brand is able to generate $1 revenue per user per month, with a base of 50 million users to be there for an average of 3 years, this means a revenue potential of $1.8 billion from services alone," the findings showed.
The other strategy is to offer accessories and other connected electronic devices like smart TVs and smart speakers.
Vivo, OPPO and Realme will be the three main gainers for 2020 in terms of additions to the net user base, forecast the techINSIGHT report.
"Realme could enter in top five brands by installed user base displacing Lenovo MBG (Lenovo + Motorola) brands. Xiaomi will continue to exhibit growth in user base while Samsung could start showing off decline in its user base or grow with a low percentile," the report added.