Analysts estimate mass adoption only two-three years down the line, with 5G capable smartphones introduced in the ₹10,000-₹20,000 range.
Analysts estimate mass adoption only two-three years down the line, with 5G capable smartphones introduced in the ₹10,000-₹20,000 range.
10x faster internet speed, 8K movie download in seconds and console quality gaming experience on a smartphone – these are the many benefits that 5G network will bring to the users. However, the lack of affordable equipment and high tariffs can slow down the adoption of these services.
even though 5G services unveiled by Prime Minister Narendra Modi Just last week, the first 5G smartphone in the country was introduced two years back in 2020. Since then, the total 5G smartphone penetration has reached nearly 50 million shipments of the total smartphone base of 550 million units.
Currently, almost all smartphones priced above Rs 30,000 are 5G smartphones. While these 5G-enabled smartphone users will not need to switch devices to experience 5G services once the network goes live in their cities, analysts say they only expect premium phone users to switch to 5G. are doing. A massive switch is possible only when there are good equipment options available in the sub-₹20,000 category.
“The real 5G years in India are yet to come, which will be marked with the introduction of massive volumes in the ₹10,000- 20,000. It is significant that for the highly price-conscious segment, 5G options are available for less than ₹10,000; But looking at the past trends and consumer behaviour, the massive opportunity is likely to fall in the range of ₹10,000-20,000,” according to a report by Tekark.
For a 5G device, people will have to spend more as the average selling price has already increased by 15-25% after the launch of the 5G device.
While 5G may come as a ‘savior’ for the smartphone industry, which has seen its user base stabilizing over the past three years, users will have to wait two-three years for the use cases to be explained. Techarc founder Faisal Kawoosa said that switching to 4G gave users access to video content, OTT apps as well as aggregator apps like Uber, Swiggy and Zomato. “… , which stands out as the primary use case for 5G for consumers.”
According to Prachir Singh, Senior Research Analyst, Counterpoint Research, Indian consumers want to be future proof. They want a 5G device, but whether they will continue to use 4G services or shift to a 5G plan will depend on the tariff. “Many people in China also have 5G devices, but only a few users are availing 5G services. So, everything will depend on the tariff. But from a device standpoint, 5G will be the name of the game.” In China, where 5G services were launched in the second half of 2019, 5G users account for 40% of the total smartphone base.
smartphone industry savior
“After a two-year hiatus, the smartphone industry is poised for an upward move due to the expected surge in demand, thanks to 5G,” the Tekark report said. Adding to the installed capacity of smartphones in India has been slow. As a result, in the last three years, the country has been able to add around 100 million users to the smartphone base.
In any given year, around 145-155 million smartphones are sold in India with a cumulative value of a little over ₹3 lakh crore. By the end of this year, a third of the total smartphones sold in India are expected to be 5G devices. “Techarc considers 2024 to be the year of the flip for 5G, when 5G smartphone sales will contribute more than half (54.5%) of total smartphone sales. It doesn’t mean that 4G smartphones will end anytime soon.”
According to Counterpoint Research, 16% of total smartphone shipments of 168 million last year were 5G devices, and this year, it is likely to go up to 35% of the expected smartphone shipments of 175 million.
Experts expect the market for 5G devices to be primarily driven by replacement/upgradation opportunities and more than 85% of sales for the period 2023-2025 will be due to replacement or upgrades where existing smartphone users can either buy a new smartphone. Will buy To achieve 5G capability or additionally move to the next section in the ladder to experience high end specifications like latest processor, high configuration of RAM/ROM, premium quality of components as well as high grade materials.
Contribution of Smartphones in Telecommunications
Smartphones will continue to play a significant role in the size of the Indian telecom sector. This has resulted in a doubling of direct consumer spending in the sector from ₹1 to ₹2 for every ₹3 earned by the sector, according to Tekark. The size of the smartphone industry in India has already exceeded the telecom services revenue in early 2021 and has surpassed the size of telecom equipment and infrastructure in 2022. “This is happening because of the shift in the smartphone industry towards buying premium to expensive smartphones. (₹25,001-50,000) and Lux (₹50,001 and above) segments,” it added.
The growth of smartphone revenue can be attributed to increase in smartphone prices due to supply chain pressures as COVID-19 has forced OEMs to increase prices by 10-15%. Additionally, 5G has been a major reason for increasing the average selling price or ASP of smartphones.