At a time when the global smartphone market has grown like never before, a recent report suggests that the number of active smartphone brands has declined sharply. According to Counterpoint’s Global Handset Model Sales Tracker, the number of active brands has come down to almost 250 this year from over 700 in 2017.

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Among the popular brands that existed in the market during the mentioned period were Microsoft Lumia, BlackBerry and LG. The list also includes several homegrown brands, which were once extremely popular, like Micromax, Intex and Karbonn.

What has led to the decline in number of smartphone brands?

As per the Counterpoint report, major technological transitions are one of the key factors that resulted in a downfall in the number of active brands.

"A maturing user base, improving device quality, longer replacement cycles, economic headwinds, supply-chain bottlenecks and major technological transitions such as 4G to 5G have gradually whittled down the number of active brands and their volumes over the years. For example, local smartphone brands, once known as “local kings”, like Micromax in India and Symphony in Bangladesh, have lost significant share or even exited over the last five years," the report said.

Decline of local brands

The report said that several local brands exiting the market contributed significantly to this decline.

"Strikingly, the decline in the number of active brands is coming largely from local brands, while the number of global brands has remained mostly consistent. Most local brands operate in lower price bands and in regions that have fragmented markets across wide geographies, like Asia-Pacific, Latin America and Middle East & Africa," the report said.

Why have local brands failed?

The report has mentioned several reasons which led to the exit of the smaller local brands. 

Some of the key ones were:

  • Inability to keep up with market demand for better specifications, design, brand value and ecosystem integration.
  • Highly aggressive Chinese brands like Xiaomi, Oppo and Vivo.
  • Industry headwinds like the Covid-19 pandemic and component shortages.