The leading 30 cities in India have registered a 20.4% quarter-on-quarter growth in Q3 2016 over Q2 2016 based on Monthly City Level Smartphone tracker of International Data Corporation (IDC). During the festive month of October 2016, the tier 2 and 3 cities led the charge with a growth of 23.3% over previous month mainly due to vendors focusing on new affordable launches, higher spending on marketing and innovative payment options.

According to Upasana Joshi, senior market analyst, IDC India, “The key four months from July to October 2016 made up more than 40% of the annual smartphone sales.”

“It was almost like a 'Chinese Smartphone Diwali' across all city tiers. China-based players contributed significantly to the growth at the offline retail counters, while continuing to dominate the online channel. These vendors collectively accounted for more than 40% market share in the top 30 cities during Diwali month, primarily driven by 4G enabled handsets. Oppo and Vivo continue to shake the traditional line up of Indian vendors with their superior build quality, massive marketing investments in the offline channel.” Joshi added.

In the premium smartphone category of ₹19,998.67 crore ($300) and above, Apple grew further on the back of the newly launched iPhone 7 series and the already hit series of iPhone 5s and 6. The Samsung Galaxy S7 Edge continues to pull major demand, in addition to the series of new model launches by Samsung across both offline and online channels.

“We feel that the demonetisation process, currently underway, will lead to a significant but temporary contraction in the mobile phone market in Q4 2016. Due to relatively slower sales, the inventory in channel is piling up which will take some time to be liquidated as the currency situation improves,” said Navkendar Singh, senior research manager, IDC India.