Indians buy more expensive smartphones, pushing ASP to highest levels on record, Telecom News, ET Telecom


NEW DELHI: Indian consumers are buying more expensive smartphones in the market, pushing the average or ASP selling price of smartphones to the highest on record of $ 226 during the July-August period, up 19% from at the same time last year. The ASP is now expected to cross the $ 240 mark to $ 266 at the end of the current holiday season, analysts say.

The festive shopping season in India this year kicked off in the first week of October when online retail giants Amazon and Flipkart announced their sales for the ‘Great India Festival’ and ‘Big Billion Day. “. The season will end on November 4 with the Diwali festival.

Counterpoint analyst Prachir Singh said that due to the pandemic, consumers may have accumulated savings, which will push them to opt for a more expensive device. “The Indian market for ASP smartphones is growing steadily. The market broke through the monthly ASP of $ 200 in October 2020 and continues to trend. During the past holiday season, the ASP smartphone market grew 7% month-on-month, ”Singh said.

“We believe that the market will also see growth during the holiday season, which could lead the ASP in the market to break through the $ 240 mark through attractive promotions and offers during the holiday season, helping OEMs and chains to push the high-end segment devices that boost ASP, ”Singh said.

He added that ASP is also motivated by multiple programs and funding options focused on affordability. “Smartphone upgrade plans have seen an increase in adoption. Additionally, free EMIs make high-end devices affordable for mid-segment consumers. “

TechArch founder and chief analyst Faisal Kawoosa said that compared to the annual ASP of around Rs 15,000 ($ 200) this festive quarter people are likely to buy smartphones with an average price tag. of just over Rs 20,000 ($ 267). The main reason is that the market is primarily driven by replacements, which in the case of smartphones are actually upgrades.

“The holiday season has boosted smartphone sales in India due to strong consumer demand during Dussehra and Diwali,” said Prachir Singh, senior analyst at Counterpoint Research. “This trend has been accelerated this year by strong pent-up demand supported by aggressive promotions in the mid- and high-end segments. “

“People, by changing their smartphone, spend between 15 and 30% more on the new purchase. In India, we have over 70% of users owning a smartphone under Rs 15,000 which is ASP. Now, when they upgrade, these users buy more expensive phones to boost their performance, which mostly requires higher specifications, ”Kawoosa added. and the price increases taken by brands. “Growth is not driven by demand but by supply. “5G model launches and the overall rise in brands’ prices due to component shortages and supply chain challenge have led to the rise in ASP,” Navkendar Singh, director, told ET. research at IDC.

Singh added that consumers and phone brands don’t have a lot of choice. “Handset brands are forced to raise prices and consumers don’t have great choices at low prices. “

Kawoosa said that a smartphone is increasingly becoming a user’s most essential gadget. Thus, we are ready to spend more to obtain a powerful device, highly reliable and complementary to needs such as longer battery charges, faster recharges and features powered by AI, for which you need processors. high performance, which increases the cost. “The same goes for the display and audio experience for the OTT and other consumptions. “

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