India is the second-largest market for smartphones in the world, and its continuing growth, as well as steps taken by the government and regulators, are causing leaders in the smartphone space to change their practices to meet its demands.

Total Smartphone Shipments In India
Business Insider Intelligence

While the introduction of 5G networks has been the dominant driver of change in a number of markets — the US, China, and South Korea chief among them — India is still a ways away from launching 5G. And differences in network timeline, regulatory framework, and consumer demand are driving new investments and expanded product lineups.

Here are a couple of key announcements that illustrate the Indian market's impact on the wider smartphone space:

  • Samsung will invest $500 million to open a new display manufacturing plant near New Delhi, according to TechCrunch. The plant will allow the South Korea-based technology giant to build parts for smartphones and other screen-equipped devices for sale in India as well as for export. India imposes 20% import duties on technology devices, including smartphones and networking equipment, which is why companies across the space — including Apple, Foxconn, Huawei, and Ericsson — have shifted some of their production to the country to bypass those tariffs. Samsung already sports a mobile device manufacturing plant in India, and it's looking to leverage the facilities to contest Xiaomi for the top spot in the country's smartphone market.
  • Qualcomm announced three new smartphone chipsets for 4G devices at an event in New Delhi. The new Snapdragon chipsets — the 720G, 662, and 460 — will bring many of the advancements Qualcomm has delivered to its 5G-enabled chipsets like the Snapdragon 865 and 765 to 4G-only phones. These features include Wi-Fi 6 and Bluetooth 5.1, as well as improved AI tools and compatibility. Qualcomm's new chipsets will allow midrange 4G phones to come to the market, and it's specifically targeting India, according to Rajen Vagadia, vice president and president of Qualcomm India.

Cracking the price-sensitive Indian smartphone market can allow a smartphone manufacturer as well as its partners to reinforce revenue streams in large volume. The average smartphone in India sells for $159, according to IDC, and 80% of devices sold are under $200.

Adding a 20% surcharge on top of list prices to account for tariffs can easily push costs above palatable levels for potential customers, while eating that cost could reduce the incentive to pursue the market. To get at this market, Samsung is looking to build up a manufacturing base to compete with Xiaomi, which also makes smartphones in India, while Qualcomm's chipsets could enhance performance for devices that will cater to the country's consumers.

India is a pivotal smartphone growth market — there are around 350 million smartphone users in a country with a population of over 1.3 billion — and companies are now directing greater attention to building up technology and resources to compete for those consumers and the revenue their purchases could bring in.

Signup Today: Connectivity and Tech Pro by Business Insider Intelligence