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

The Deloitte TMT Prediction 2022 represents the world we live in today and in the foreseeable future. It examines the role of COVID-19 as a catalyst for several emerging telecom trends, emphasizing the lockdown-driven expansion of console gaming, streaming video services, health and wellness technologies, enhanced connectivity for both enterprises and homes, etc. Is. This year’s predictions also throw up to expand the renewable energy mix in the telecom sector such as non-renewable tokens (NFTs), floating solar panels (flotovoltaics), innovative wearables in healthcare, tech-assisted mental wellness solutions and sustainable smartphones such as Highlight upcoming opportunities. The Deloitte TMT Prediction 2022 includes the impact of 5G as well as five-year projections for India’s smartphone boom, highlighting the expected growth in smartphone sales in India due to the increase in 5G penetration.

The Indian telecom sector has seen some major changes in 2021 that promise to reset the growth trajectory and generate revenue for the industry. The measures recently proposed by the Union Cabinet have provided relief to the cash-strapped sector, thereby encouraging investment. 5G Device. cabinet too USD 1.62 billion (about Rs 12,600 crore) PLI plan approved For the telecommunications and network equipment manufacturing industries.

India likely to have 1 billion smartphone users in the next five years
In 2021, there were 1.2 billion mobile customers in India, of which around 750 million used smartphones. According to our research, the smartphone market will reach one billion users by 2026. From 2021 to 2026, this growth is likely to be driven by the rural sector at a CAGR of six per cent, while the urban sector is expected to grow at a CAGR. of 2.5 percent. High Internet adoption is expected to drive demand for smartphones; This increased demand will be driven by the need to adopt fintech, e-health and e-learning.

New smartphones will account for 95 percent of all smartphone replacements in the urban market in the coming five years
As consumer demand continues to grow in India, the market has exhibited rapid replacement rates. In an urban area, the average lifespan of a mobile device is three years. According to estimates from Deloitte, 95 percent of replacement in the urban market in 2026 will be towards new smartphones, compared to 75 percent and 25 percent in 2021, respectively, only five percent toward pre-owned phones. The rural population is expected to exhibit a similar trend where the average lifespan of a phone is four years. About 80 percent of replacements are expected for new devices, compared to 20 percent for pre-owned ones in 2026. As the number of smartphone users grows, it is anticipated that the replacement of feature phones with smartphones will eventually decrease.

5G is believed to be the fastest-adopted mobile technology
According to a Deloitte analysis, smartphone demand in India is expected to grow at a CAGR of six per cent from 300 million in 2021 to nearly 400 million smartphones in 2026. This high demand is likely to arise mainly after the launch of 5G, which alone will contribute to 80 per cent of devices (about 310 million units) by 2026. 5G is believed to be the fastest-adopted mobile technology due to its diverse applications, such as high-speed gaming and remote healthcare. After the launch of 5G, additional shipments of smartphones are expected to be 135 million (cumulative) by 2026.

India’s smartphone revolution is expected to generate an estimated total cumulative shipments of 1.7 billion smartphones by 2022-2026, creating a market of around $250 billion (approximately Rs 19,39,700 crore), of which over 840 million 5G handsets are sold. likely to go. in the next five years. From 2022, 5G penetration will increase year on year, resulting in an increase in 5G smartphone sales in India. Also, newly announced $10 billion (approximately Rs.77,600 crore) incentive scheme Strong support for more governments to promote semiconductor manufacturing in India BharatNet Initiatives in the recent budget release to fiberize rural and isolated areas by 2025 are guaranteed to boost smartphone sales in India.

The author is a partner and telecom sector leader at Deloitte India.

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