While in 2014, around 5.5 million Smartphones were shipped in above INR 20,000 segment, this was at 6.3 million in 2015 and it pegged to reach 7.5 million in 2016.  This segment has grown at an annual average rate of 17% since 2014, and it expected to grow 19% in 2016.  Though we are seeing decline in percentage contribution of this segment to the overall Smartphones, this is primarily because of the fact that predominant volumes are still in the entry level segment of Smartphones, which is less than INR 10,000. However, in 1Q 2016, we saw this changing for the first time, where maximum contribution of 22% to the overall Smartphone shipments came from INR 10000-15000 price band.  If this becomes a long horizon trend, which seems to be so, the high-end segment of Smartphones is going to only strengthen.

The case of OnePlus for 2016 becomes only stronger.  While the percentage contribution of greater than 20k segment declines YoY and may continue to so for a couple of more years, OnePlus is steadily increasing its market share.  In its year of launch in 2014, it garnered just 0.7% which jumped to 6.1% in 2015 and we expect this to reach 6.4% by the end of year 2016.  This growth of OnePlus will essentially be based on two pivots of the success of OnePlus 3 and the offline expansion it has just begun.

As the Indian Smartphone market continues its pitch for transition, OnePlus not only is emerging as a strong player in the high-end Smartphones category, it is also perhaps setting the trend for others to follow by carving out their niches and becoming strong there.  Rather than playing all along the spectrum of segments, it is good for emerging players to follow the OnePlus path and not only emerge strong but also become complimenting partners in the Indian Smartphone market.  Otherwise, I fear we may see the operators’ story being replicated here and in a few years from now, be talking about mergers and acquisitions apart from end of brands.