India recorded 1.2 billion mobile subscribers in 2021, of which, about 750 million were smartphone users. The smartphone market is expected to reach 1 billion smartphone users by 2026, according to Deloitte’s study. This growth is likely to be propelled by the rural sector at a CAGR of 6%, compared with the urban sector growing at a CAGR of 2.5% from 2021 to 2026.
Higher internet adoption is expected to fuel demand for smartphones; this increased demand will be propelled by the need to adopt fintech, e-health, and e-learning. According to Deloitte’s analysis, demand for smartphones in India is expected to increase at a CAGR of 6% and high demand is likely to be primarily created after the launch of 5G, which will alone contribute 80% of the devices (about 310 million units) by 2026. 5G is believed to become the fastest-adopted mobile technology due its diverse applications, such as high-speed gaming and remote healthcare. After the launch of 5G, additional shipments of smartphones are expected to be 135 million (cumulative) by 2026.
As consumer aspirations in India continue to rise, the market has shown a fairly quick replacement rate. The average lifespan of a mobile device in the urban sector is three years. Per our analysis,
95% replacements in the urban market in 2026 will be toward new smartphones, while only 5% toward pre-owned phones compared with 75% and 25%, respectively, in 2021. The rural population is expected to demonstrate a similar trend where the average lifespan of a phone is four years. About 80% replacements are likely to be for new devices, while 20% for pre-owned ones in 2026. Correspondingly, replacement of feature phones with smartphones is expected to gradually decrease due to a rise in the number of smartphone users. Feature phone replacements will reach 60 million in 2026 from 72 million in 2021 for the urban sector. These replacements will drop to 60 million in 2026 from 71 million in 2021 for the rural sector.
