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1. CASIRJ Volume 8 Issue 10 [Year - 2017] ISSN 2319 – 9202
A Critical Analysis of Indian Smart Phone Industry
Dr. Mohammad Furqan Khan
School of Business Studies
Islamic University of Science and Technology
Awantipora, Pulwama, J&K (India)
Abstract
This paper is an attempt to critically analyze the Indian Smart phone Industry and see where this
industry stands within this giant economy. Therefore to achieve these objectives , the discussion
in this paper are on smart phones, factors that influences the acceptance of Smartphone, market
share of big brands and its influence on the GDP of the country.
1. INTRODUCTION.
The term „Smartphone‟, refers to a multimedia phone handset, which is a multifunctional
electronic device that has features ranging from Camera, Audio-Video Playback, and Web
browsing to a high-density screen display along with several other multimedia options. Smart
phone have functions that are similar to those of computers. This is a single solution for all
communication problems from voice calls to social media everything is accessible. A
Smartphone is a mini computer in your hand that gives you access to media players, digital
cameras, GPS, web browsing, videos, emails ,audio-videos playback, voice chatting and etc.
These days most of the websites running business online are launching their mobile versions.
These application have contributed to the huge increase in the online shopping and has been a
potent reason for adopting Smartphone‟s. In India there are more than 30 core smartphone users
and number is increasing rapidly. Even in cities with smaller population of less than 10 lakh also
have 6 percent people with Smartphone‟s.
Nielsen Informate in one of its reports states that 87% of the Smartphone consumers use it for
searching things online whereas 80% use it for social networking. For chatting and mails the
percentage is 72% and 59% use smartphones for video streaming and navigation. More than 30
percent people use Smartphones for banking and shopping. Using mobile phone for watching
television online is also a new trend in urban India and 25% consumers use Smartphones for this
purpose. These numbers shows that a large number of Indian consumers have been using
Smartphone for various thing which is dominated by shopping, searching, social networking,
taking selfies, entertainment, checking mails and doing business etc.The major players in
Smartphone manufacturing in India are: Apple, Samsung, Xiaomi, Sony, Motorola, HTC, and
Lenovo.
2. Factors Influencing the Acceptance of Smartphones.
Smartphones have recently dominated the mobile phone market. Cellular phones have been
transformed from conventional make/receive call devices to highly interactive multimedia
systems, providing Wi-Fi (Wireless Fidelity) internet connection/access. Smartphones are

2. CASIRJ Volume 8 Issue 10 [Year - 2017] ISSN 2319 – 9202
intended to satisfy users through a variety of advanced technological characteristics and
functionalities (Ling et al. 2006; Chen et al., 2010). By taking into account that smartphones
present some common features with conventional mobile phones, characteristics such as the
phone style, physical design, color and size can contribute positively to the customer satisfaction
(Chang et al., 2009). Additional embedded features, such as power-efficient microprocessors,
modern operating systems and extra available memory, increase more the smartphones‟
capabilities and support more their popularity. By considering the provided functionalities,
smartphones offer 3G (third-generation) and broadband access to Internet services, web
browsing services, e-mail access, connection to social networks and video streaming. Users may
have access not only to MP3 player and gaming but also to additional helpful/enjoyable
functions, such as watching TV, access in maps (through a Global Positioning System-GPS) and
internet banking. Contemporary mobile phones also include Personal Information Management
(PIM) applications, such as phonebooks, appointment books, notepads and calculators (Park and
Lee, 2011; Heo et al., 2009). Generally, this diversity of characteristics/functionalities positively
impacts the user satisfaction that can be attributed to issues like perceived convenience, usability,
efficiency and security (Kim et al., 2004; Park and Chen 2007). Factors such as the ability to
perform remote control of everyday things, independence of time and place and fast
communication, influence the user preferences (Rodriguez-Repiso et al., 2007). Effective service
support and help-desk services have also positive impact on customer satisfaction (Kim et al.,
2004). However, offered functionalities are often in conflict with cost and difficulty/complexity
issues concerning the device usage. On one hand, smartphones, by offering functionalities
similar to a personal computer, become complex and “learning consuming” devices and,
consequently, novice technology users may be discouraged from using these devices (Chang et
al., 2009). In many cases, smartphone users are stressed as they confront usability problems and
difficulties to learn how to use the phone features and applications.
On the other hand, smartphone devices are more expensive compared to conventional mobile
phones. A potential buyer should balance the cost of purchasing the device with the level of
offered characteristics/functionalities. Furthermore, smartphones are energy “hungry” devices
and users tend to prefer models characterized by efficient battery functionality (Chang et al.,
2009). Contemporary mobile phones are thus powerful software intensive technological products
which present a significant market potential. However, to meet high expectations of current or
potential customers, many issues have to be considered as well as possible trade-offs between
them (Kim et al., 2004)
2.1 Market Share of Smartphones in India.
The influx of Chinese smartphones seems to be growing steadily in India. As per International
Data Corporation's (IDC) Quarterly Mobile Phone Tracker, 27 million smartphones were
shipped in India in the first quarter of CY2017 with a 14.8% growth over the same period last
year. In the first quarter, Chinese smartphones held 51.4% share of smartphone shipments in

3. CASIRJ Volume 8 Issue 10 [Year - 2017] ISSN 2319 – 9202
India with a growth of a whopping 142.6% growth year-on-year. On the contrary, share of
homegrown smartphones dropped to 13.5% in the first quarter of this year from 40.5% last year.
The single winner here was Chinese major Xiaomi‟s Redmi Note 4. It was the most shipped
smartphone in India as against Samsung J2 in the quarter before that.
The Quarterly Mobile Phone Tracker report has also spotted some trends in India, like the
average selling price of smartphones has increased from $131 in Q1 2016 to $155 in Q1 2017.
With most networks moving to 4G, 94.5% of smartphones shipped in the first quarter were 4G-
enabled, with Chinese smartphones leading the race here as well. Camera quality in most phones
has also increased over time. As per the IDC report, five out of 10 smartphones shipped in Q1
had a rear camera with 13 megapixel or more. Indian companies such as Micromax, Lava,
Reliance Jio and Intex which together controlled 40 % market share in Q1 2016, have slumped
further and now control just 13.5% of the smartphone market share. “Indian vendors are making
attempts to recapture the lost ground with new launches in sub-$100 as well as in the mid-range
segment. But intense competition from China-based vendors continues to be a major challenge
and is expected to increase in coming quarters.
2.2 Impact of Smartphones on GDP of India.
The contribution of mobile industry to the country's GDP will increase to 8.2% by 2020, a
government report said today. The joint report, released by the Department of Industrial Policy
and Promotion and the Department of Telecom, said the industry contributes 6.5% to the GDP
currently. The mobile industry in India, currently contributing 6.5% ($140 billion) to country's
GDP, and employing over 4 million people (direct and indirect), is projected to grow rapidly in
the coming years. "By 2020, the industry is expected to contribute 8.2% to country's GDP," the
report said. As per the previous data shared by former telecom Minister Ravi Shankar Prasad in
Parliament in December, revenue generated by the telecom sector in 2014-15 was ฀ 2,42,900
crore, accounting for 1.94% of total GDP. However, the ratio of revenue size and its contribution
in terms of percentage to the GDP varies every year due to variation in the growth of economy,
the minister had said. In 2011-12, the telecom sector accounted for 2.1% of GDP with revenue of
1,85,930 crore, while in the next year it stood at 2,07,498 crore (2.07% of GDP). The DIPP-DoT
report said that the mobile industry will add 800,000 more jobs. In terms of unique mobile phone
subscribers, India is expected to cross the 1 billion mark by 2020. India will see an increase in
adoption of 4G services with number of 4G connections estimated to grow to 280 million by
2020 from just 3 million in 2015," the report said. Total Foreign Direct Investment (FDI) in
telecom sector from April 2014 to March 2016 was around $4.19 billion.
3. Conclusion
The first thing that was discussed in this paper was how smart phones are different form the
traditional mobile phone. These smartphones are like minin computers that can be used for
everything from entertainment to business. Then in the second section of the paper factors that
persuade consumers to purchase Smartphone‟s were discussed in detail. It can be concluded that
functionalities like broadband access to internet services, web browsing services, e-mail access,
connection to social networks, video streaming and on the top of it 3G and 4G technologies is

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really what makes sense for a consumer to buy Smart phones. Chinese Smartphone brands are
doing really great in the Indian markets and particularly Xiaomi has the lion‟s shares. This
growth of the Smartphone Industry has positively influenced the gross domestic production of
India and economy is growing day by day.
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