Smartphone users will reach 1 billion by 2026: Study

New Delhi: India will have 1 billion smartphone users by 2026 with rural areas driving the sale of internet-enabled phones, a Deloitte study said on Tuesday.

India had 1.2 billion mobile subscribers in 2021, of which about 750 million are smartphone users. It is poised to be the second-largest smartphone manufacturer in the next five years. "The smartphone market is expected to reach 1 billion users by 2026," according to Deloitte's 2022 Global TMT (Technology, Media and Entertainment, Telecom) predictions. This growth is likely to be propelled by the rural sector at a compound annual growth rate (CAGR) of 6 per cent, compared with the urban sector growing at a CAGR of 2.5 per cent 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," it said. 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 programme. Deloitte said 95 per cent replacements in the urban market in 2026 will be toward new smartphones, while only 5 per cent will be toward pre-owned phones compared with 75 per cent and 25 per cent, 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 per cent replacements are likely to be for new devices, while 20 per cent for pre-owned ones in 2026. Correspondingly, the 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.

The India edition of Deloitte's 2022 Global TMT predictions indicates that digital and mobile are the key enablers of the future of technology. Deloitte said 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 in 2023. "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.