Brendan James: takeaways from the east, March 2019

In reporting on China and India, we truly are seeing a tale of two countries. In one market all of our favorite brands are still jockeying for position and in the other, alternative markets are being courted for devices. Units are moving, it’s all a matter of where. Welcome to another Takeaways From The East.

All manner of interesting news is emanating from boom-period India. Diwali chummed the waters enough for the big sharks of the smart-phone game to feast on the subcontinent, leading to the kind of late-year dash we see in many of the world’s leading markets. The premium smartphone segment came out of Q4 2018 boasting 16% year-on-year growth for the quarter, resulting in an overall spurt of 8% over 2017. Who led the pack for 2018? Not Xiaomi, who surprisingly did not even crack the top three. Not Apple, who has hit a patch rough enough for them to start rethinking their manufacturing strategy, which will be discussed in a moment. And not even OnePlus, the second-place winner whose highly successful 6 and 6T models helped the brand post three straight quarters as the top mover of premium units.

The winner for the year? Samsung. According to Counterpoint Research, the South Korean stalwart captured 26% share of the premium segment, with shipments growing 72% year-on-year in Q4. A lot of this can be attributed to the newly launched Galaxy A9, with its trend-setting quad rear-camera phone, in the ₹30,000 - 40,000 (USD $400-550) price segment. Samsung edged out OnePlus in total market segment, 34% to 33%.

What then for Apple, who suffered 25% drop in year-on-year for the fourth quarter? Counterpoint alleges that the drop in units moved stems from high import tariffs - as high as 20% - in addition to already high prices that the California giant requires for its newest top-of-the-line models. The obvious solution, you probably think, is to bypass the tariffs by manufacturing in-country. Apple already has you beaten to the punch; plans are underway to build a Foxconn manufacturing facility in Tamil Nadu, per the Economic Times of India.