India Smartphone Market–Huge future potential!

2010 has undoubtedly been the year of smartphones – The all in one device that takes care of literally every digital need of a youth, be it Email, Social Networking, photography, chatting, messaging, gaming. You name it and today’s smartphones have it in them!

Having said that, India has lowest penetration of smartphones amongst youth in the world. Although, actual number of smartphones may be high, thanks to huge mobile subscriber base.

Lets look at some of the findings of recent whitepaper released by Nielsen – Mobile Youth Around the World – and understand the kind of market potential we have for Smartphones in Indian Market.

Smartphone Penetration amongst Indian Youth

Interestingly, of all the Indian youth who have mobile phones, only 10 percent have smartphones and 90 percent of them still have feature phones. Density of smartphones amongst youth is highest in Italy where 47 percent of them carry smartphones. The report also reveals that most young people with mobile phones choose their own devices and only 16 percent youth go by their parent’s choice of the phone.

Smartphone Penetration – Male Vs Female

Among the youth, who have smartphones, only 20 percent comprise of females, again which is one of the lowest in the world. Even our neighbouring country China, has about 40 percent female smartphone users. While in the U.S, female Smartphone users (55 percent) out number their male counterparts (45 percent).

Price – Most important mobile purchase Driver

India is a price conscious country – Infact, about 4 out of 10 Indian youths have sighted that as the primary purchase driver, which is more than any other country. Incidentally, in China, Form and shape of the phone takes precedence when choosing a smartphone.

Smartphone Market Demand

In my opinion, 90 percent of all user want to move to Smartphones, given the kind of features it offers, but smartphones is a much newer phenomenon in India as compared to rest of the world and hence such low penetrations. The sales of smartphones actually saw tremendous growth only in last few months, specifically due to fall in prices of phones. Till start of this year most of the smartphones cost above 15k which was out of budget of most of Indians, especially younger people.

But the scenario has changes drastically, thanks to local Indian brands like Micromax, Zen, Maxx and others, who have bought smartphones in every ones reach. Today one can buy a decent smartphone for as low as 3000 rupees (about 60 – 70 USD).

Smartphone Market Potential in India

But, still the market potential remains huge – 80 percent of Smartphone market is still there for the taking (Imagine the numbers we are talking here). There will be two main factors that will decide how soon the Smartphones proliferate. The price of the handset and cost of Data usage.

Apart from handset prices, Telecom Operators have to ensure that cost of data transfer (especially 3G going forward) has to be affordable, otherwise smartphones will always be looked as glorified bulkier feature phones!

Whats your take on this ?