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Summary

  • India should be the third largest smartphone market by 2017.
  • Samsung and local vendors Micromax and Karbonn are the major players.
  • Nokia has targeted India with new products and seems to be gaining ground.

India is emerging as a key market for smartphone suppliers with its share of global demand expected to grow from only 3% in 2013 to over 10% by 2017 ranking it third behind China and the United States.

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In terms of unit volume India comprised roughly 30 million units in 2013 but is projected to reach over 170 million units in 2017.

The rapid growth in India has key players focused on the market. A question for investors is how well the major OEM's are doing in India against some pretty strong local competition. Samsung has the lead but local vendors Micromax and Karbonn are not far behind and both Nokia and Sony have a presence in the country with a large part of the market served by a wide variety of others.

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Recent moves by major smartphone OEM's to increase their presence in India include the launch by Microsoft (NASDAQ:MSFT) through soon to be acquired Nokia of its Lumia 1520 phablet in December, 2013 followed by the 6 inch screen Lumia 1320 in January 2014.

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Source: NDTV Gadgets

The move was followed by a decision of Apple (NASDAQ:AAPL) to restart production of its older iPhone 4S model for sale at a lower price point in India and other markets. Investors looking for a clue as to how well these initiatives are faring might like to browse the Indian trade website Zauba which provides daily access to import and export data and is searchable by product or related code.

I did a bit of searching on the site and found the following interest tidbits.

Nokia

A search for Nokia phone imports into India showed a volume of 19 million units with a value approaching $900 million.

Source: Zauba

The Zauba chart of Nokia import trends show the company holding solid year over year gains in volume and value.

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Source: Zauba

Samsung

A similar search for Samsung phones disclosed over 44 million units imported into India with a value of $1.5 billion. Clearly Samsung hits higher price points than Nokia and does a lot more volume. Both the Nokia and Samsung data include feature phones as well as smartphones.

Source: Zauba

iPhone

Data for iPhone imports showed unit volume of 3.4 million with value at $500 million. Interestingly, the declared value of an iPhone import was $149 U.S.

Source: Zauba

For the iPhone, the Zauba chart of trends in volume and value shows a declining trend since January of this year.

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Source: Zauba

Conclusions

The data make some things clear.

Samsung volumes are dramatically higher than Nokia or iPhone suggesting neither of these is any danger to Samsung's grip on the Indian market any time soon. Local vendors like Micromax and Karbonn are the real threats to Samsung.

Nokia is perhaps on a winning track, capitalizing on its well accepted feature phones to sell customers up to smartphones, phablets and tablets. Time will tell if that will build to become a serious contender to the established leaders.

Apple seems unlikely to gain a lot of traction. India is desperately poor as a nation and the high price of the iPhone no doubt deters many. The decision to restart iPhone 4S production for India and other markets taken in January does not show any early signs of making much difference, it the import data are any evidence. Of course, it is early days and the real test will come this fall.

I have no current holdings in MSFT or NOK and have a small short position in AAPL.

Disclosure: I am short AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Source: Microsoft's Nokia Unit Seems To Be Gaining Ground In India