Most of India's mobile phone users are planning to upgrade to a new device in the next 12 months driven by consumers wanting 4G handsets, a trend that is positive for premium electronics giants like Apple and Samsung in the long-term, according to Counterpoint Research.
Two in three of the over 1,500 Indian mobile users surveyed by Counterpoint, said they plan to upgrade within the next year. This is a shortening of the average 24 to 30-month upgrade cycle, to just under 20 months, the analyst firm concluded.
Indian mobile users' desire for 4G capable phones with more advanced features is driving the trend. One in three respondents were considering phones with a fingerprint sensor and a better front-facing selfie camera.
The trend is positive in the long-term for the likes of Apple and Samsung, which both offer premium handsets at a high price. But in the near-term neither will see a boost in India, a country seen as a driver of growth in a slowing smartphone market.
"All the brands who are successful in sub-$200 segment like Lenovo, Xiaomi and a handful of Indian brands will benefit," Neil Shah, research director of devices and ecosystems at Counterpoint Research, told CNBC by phone.
"In the longer term you will have a bigger user base who will want to upgrade to a better phone. Apple will benefit post-2018 with a maturing user base and the 4G network will be available everywhere. People will be using more services. In the next two years it would be a good idea for Apple to roll out their retail footprint and invest in manufacturing."
Apple's cheapest smartphone model is the iPhone SE which retails in India at 27,000 rupees ($420.50). Currently sub-$200 phones are the most popular in India. Apple Chief Executive Tim Cook has continuously talked up the potential of the Indian market and revealed earlier this year that Apple had "all-time record revenue results" in the country in 2016. Apple is keen to expand and do well in India given cooling sales in China.
Cook has visited the country and met with officials. Apple has set up a partnership with Taiwanese manufacturer Wistron which is set to soon start assembling iPhones in India, a move which could bring the cost of the device down. At the same time, Samsung has struggled in India for the past few years, but has a number of lower cost devices that could appeal. But it will also be hoping to find new consumers for its higher priced Galaxy S8 smartphone which was recently released.
