Indians increase the pace of smartphone replacement; eye higher priced handsets in next purchase

Key highlights:

• The smartphone replacement cycles has been reducing across the country
• Replacement cycle in rural India has dropped the maximum by 27%
• Between 60-90% customers with smartphones below Rs 15,000 price bracket expect to buy a higher priced smartphone

While there are several smartphone companies that launch many different models every year in India, the smartphone replacement cycles has been reducing across the country. There is a steady reduction in the expected replacement cycle for phones across all city tiers, while premiumisation has accelerated, according to a RedSeer Consulting report.

The rural market in India has seen the biggest growth in replacement demand for smartphones, as the time for replacement has dropped by a huge 27%. While the average replacement cycle for smartphones was 23.2 months in rural areas, it has now reduced to 17 months.

Source: RedSeer Consulting

In the metro areas in India, the average smartphone replacement cycle had declined by 14%. While a person in Indian metros used to replace their mobile phone every 17 months on an average, now it has declined to 14.7 months.

In non-metro urban area the smartphone replacement cycle has reduced by 12%, from 20 months earlier from 17.6% in India.

The report says the reason for the reduction in replacement demand is due to the rise in income and aspirations and indicate steady growth path for e-tailers going forward.

“These trends, spurred by rising income and aspirations, indicate a steady growth path for e-tailers going forward, many of who are significantly dependent on this category,” said the report.

It is not only that the replacement cycle for smartphones has reduced but also that people wanting to buy a higher priced phone in their next purchase.

Furthermore, between 60-90% customers which have smartphones in the below the Rs 15,000 price bracket expect to buy a higher priced smartphone in their next purchase. This gives out a positive signal to retailers and e-tailers of smartphones.

Source: RedSeer Consulting

A high 93% of people in India who have smartphones in the bracket of Rs 3,000 to Rs 6,000 said that they would like to upgrade their price band in their next purchase of a smartphone.

While, 60% of the people in India who have smartphones in the price bracket of Rs 6,000 to Rs 15,000 said that they would like to upgrade their price band in their next purchase of a smartphone.

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