India to have 1 bn smartphone users by 2026: Deloitte report

 Smartphone shipments in India are expected to reach 1.7 billion units from 2022 to 2026 creating a market of $250 billion on the back of major policy reforms and telcos reviving their businesses, argue a recent report from consulting firm Deloitte.

This report -- the Indian edition of the consulting firm's 3033 Global TMT (Technology, Media and Entertainment, Telecom predictions -- further argues that the country will have a smartphone userbase of 1 billion by 2026 and will be the second largest smartphone manufacturer in next five years.

The report noted that the smartphone demand in India will increase at a CAGR of 6 per cent in the rural market and at a CAGR OF 2.5 per cent in the urban market to reach a cumulative number of about 400 million units being sold in 2026. This is largely propelled by demand for Internet services in the rural market with the adoption of e-learning, fintech and e-health platforms. Internet-enabled devices in the rural market will also get a push with the government’s plan to fiberise all villages by 2025 under the BharatNet program.

5G devices, as per the analysis, will alone contribute 80 per cent (about 310 million devices) to smartphone demand by 2026.

Furthermore, the recently announced incentive package of $10 billion to drive semiconductor manufacturing in India and the PLI schemes will encourage handset manufacturing in India to service the second-largest smartphone market in the next five years.

“India will have 1 billion smartphone users by 2026. This growth will result in over 75 percent of the subscribers using smartphones by 2026 from a sub- seventy percent as on date. 5G enabled devices will contribute 80 per cent to the devices being sold in the year 2026 and Indian consumers will purchase 840 million 5G smartphones over the next 5 years valued at $130 billion. In addition, 5G will fuel an incremental sale of 135 million smartphone units over the next 5 years,” Peeyush Vaish, Partner and Telecom Sector Leader, Deloitte India, said.

It added that the global shortage of semiconductor chips has affected the manufacturing industries across the world. As demand soars, supply is likely to be constrained in the near term, but gradually ease up in 2023. With an increase in supply and normalisation of demand, and the specific initiatives floated by GOI, India can play on the strength of its large and thriving domestic market to form a basis for setting up the domestic semiconductor and electronics manufacturing industries in the next three-five years.   

“As the ecosystem matures in the medium to long term, we expect India to emerge as a strong regional hub in semiconductor and electronics manufacturing," said P. N. Sudarshan, Partner and TMT Industry Leader, Deloitte India.
“The government’s recent announcement on the Production Linked Incentive (PLI) scheme for the semiconductor and electronics manufacturing industries has the potential to create an end-to-end ecosystem for manufacturing electronic products. We expect the broader shift to digital to continue in 2022 and drive the industry growth in the future,” he added.

 
India catching up with NFT craze

Deloitte predicts that NFTs (or non0fungible tokens) for sports media will generate more than $2 billion in transactions in 2022, about double the figure for 2021. Given the global trends and the government of India’s pending policy/regulatory framework in this area, it is a matter of time before NFT-based market for movies and sports memorabilia becomes a reality in India, the report added.