Demand for smartphones in the country is expected to increase at a CAGR of 6%, to reach about 400 million devices in 2026 from 300 million in 2021.
The launch of 5G services in the country is set to propel demand for smartphones, with cumulative shipments of devices expected to reach 1.7 billion over 2022-2026, creating a market of about $250 billion. Further, of the overall shipments, nearly 840 million will be 5G smartphones. As per a report by Deloitte, from this year onwards, 5G uptake will see a year-on year growth, leading to an increase in 5G smartphone sales in India.
According to the Deloitte report, demand for smartphones in the country is expected to increase at a CAGR of 6%, to reach about 400 million devices in 2026 from 300 million in 2021. “This high demand is likely to be primarily created after the launch of 5G, which is believed to become the fastest-adopted mobile technology due its diverse applications, such as high-speed gaming and remote healthcare,” the report said.
With a rise in consumer aspirations, the market has shown a fairly quick replacement rate. The average lifespan of a mobile device in the urban sector is three years. As per Deloitte’s analysis, 95% replacements in the urban market in 2026 will be towards new smartphones, while only 5% towards pre-owned phones compared with 75% and 25%, respectively, in 2021. The rural population is expected to demonstrate a similar trend where the average lifespan of a phone is four years. For rural market, about 80% replacements are likely to be for new devices, while 20% for pre-owned ones in 2026.
Correspondingly, replacement of feature phones with smartphones is expected to gradually decrease due to a rise in the number of smartphone users. Feature phone replacements will reach 60 million in 2026 from 72 million in 2021 for the urban sector, while for the rural segment, the replacements will drop to 60 million in 2026 from 71 million in 2021.
Overall, India is expected to have 1 billion smartphone users by 2026, from 750 million in 2021. This growth is likely to be propelled by the rural sector at a CAGR of 6%, compared with the urban sector growing at a CAGR of 2.5% from 2021 to 2026.
Higher internet adoption is expected to fuel demand for smartphones; this increased demand will be propelled by the need to adopt fintech, e-health, and e-learning.
“India will have 1 billion smartphone users by 2026. This growth will result in over 75% of the subscribers’ using smartphones by 2026 from a sub-70% as on date. 5G-enabled devices will contribute 80% to the devices being sold in the year 2026 and Indian consumers will purchase 840 million 5G smartphones over the next 5 years valued at $130 billion,” Peeyush Vaish, partner & telecom sector leader, Deloitte India said.
The recently announced incentive package of $10 billion to boost semiconductor manufacturing in India will drive handset manufacturing and make the country the second-largest smartphone market in the next five years.
The BharatNet project, through which the government is aiming to connect all the villages with high-speed broadband, is also likely to drive sales of smartphones in the rural sector.