India's Smartphone Industry and the Impact of 5G: A 5-Year Forecast - world cultures

India’s Smartphone Industry and the Impact of 5G: A 5-Year Forecast


The Deloitte TMT 2022 forecast represents the world we live in today and the future to come. It examines the role of COVID-19 as a catalyst for a number of emerging communication trends, and emphasizes expansion driven by the shutdown of console games, video streaming services, health and wellness technologies, advanced connectivity for both businesses and families etc. Shedding light on upcoming opportunities in the telecom sector such as non-fungible tokens (NFTs), floating solar panels (floating photovoltaics) to expand the mix of renewable energy, innovative wearable technology in healthcare, technology-assisted mental wellbeing solutions, and sustainable smartphones. The Deloitte TMT 2022 forecast also features five-year estimates of the smartphone boom in India along with the impact of 5G, highlighting the expected rise that India will see in smartphone sales due to the increased penetration of 5G.

The Indian telecom sector has seen some major changes in 2021 which promise to reset the growth trajectory and generate revenue for the industry. The recent measures proposed by the union’s cabinet provided a respite for the cash-strapped sector, and encouraged investment in 5G equipment. The Cabinet also approved a $1.62 billion (about Rs 12,600 crore) PLI scheme for the telecom and network equipment manufacturing sectors.

India is preparing to absorb 1 billion smartphone users in the next five years
In 2021, India had 1.2 billion mobile customers, with about 750 million smartphone users. According to our research, the smartphone market will reach 1 billion users by 2026. From 2021 to 2026, the rural sector is likely to drive this growth at a compound annual growth rate of six percent, while the urban sector is expected to grow at a compound annual growth rate of 2.5 percent. . High internet usage is expected to increase the demand for smartphones; This growing demand will be driven by the need to embrace financial technology, e-health, and e-education.

New smartphones will represent 95 percent of all smartphone alternatives in the urban market in the next five years
With consumer demands in India continuing to rise, the market has shown a rather fast replacement rate. In the urban sector, the average life of a mobile device is three years. According to Deloitte estimates, 95% of the alternatives in the urban market in 2026 will be towards new smartphones, while only 5% towards pre-owned phones compared to 75% and 25%, respectively, in 2021. It is expected that the population will show Rural is a similar trend with the average phone being four years old. The replacements for new devices are likely to be about 80 percent, while 20 percent for pre-owned devices in 2026. With the growth of smartphone users, the replacement of feature phones with smartphones is expected to decline eventually.

5G is believed to be the fastest mobile technology to adopt
According to Deloitte analysis, smartphone demand in India is expected to increase at a compound annual growth rate of six percent, reaching around 400 million smartphones in 2026 from 300 million in 2021. This high demand is likely to be generated mainly after The launch of 5G, which alone will contribute 80 percent of devices (about 310 million units) by 2026. 5G is believed to be the fastest mobile technology to be adopted due to its diverse applications, such as high-speed gaming and telehealth. After the launch of 5G, additional smartphone shipments are expected to reach 135 million (cumulative) by 2026.

The smartphone revolution in India is likely to generate an expected cumulative shipment of 1.7 billion smartphones over the period 2022-2026, creating a market worth around $250 billion (~Rs19.39,700 crore), potentially selling over 840 crore. million 5G phones over the next five years. From 2022, the penetration of 5G will increase year on year, which has led to an increase in the sales of 5G smartphones in India. Also, the newly announced $10 billion (about Rs 77,600 crore) stimulus plan to boost semiconductor manufacturing in India and the strong support of governments for the BharatNet initiative in recent budget releases for rural and fiber-insulated areas by 2025 are guaranteed to boost smartphone sales in India.

The author is a partner and industry leader at Deloitte India.

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Gadgets 360 Insights articles are written by industry leaders, analysts, researchers and experts in various fields related to personal technology, exclusively for our readers.

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