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Smartphones Speed the Digital Revolution in India

The number of smartphones will grow more than tenfold between 2012 and 2016

December 18, 2012

India is on the cusp of a full-fledged digital revolution, but substantial obstacles remain, according to a new eMarketer report, “India Online: Defining the New ‘Digital Class.’” Right now the country can best be described as a place of vast, untapped potential. Internet penetration in India remains quite low, at just under 9% of the population, but due to the country’s massive population, it trails only the US and China in terms of total internet users.

Internet Users and Penetration in India, 2011-2016 (millions, % of population and % change)

While recent economic growth has helped develop a wider middle class, a sharp divide remains between India’s haves and the have-nots, with the economies of the most populous cities, often referred to as the “metros,” outpacing those of rural areas.

This gap is reflected in internet usage. The Internet and Mobile Association of India (IAMAI) reported that in June 2012, 71% of “active” internet users—80 million—were in cities, while the remaining 31 million lived in rural areas.

Active* Internet Users in India, June 2011-Dec 2012 (millions)

Relying on census figures, the IAMAI estimated that 339 million people lived in urban parts of the country, and that 833 million resided in rural sections. That means that about 23% of those living in metros used the internet at least once a month, compared with approximately 4% in rural areas. IAMAI projects that the number of active internet users in rural areas will climb by 7 million between June and December 2012, to reach a total of 38 million. By comparison, the number of active internet users in cities will jump by just 4 million over the same time period, reflecting urban markets’ greater maturity.

To drive that rural uptake—and continued urban uptake—mobile devices will supplant PCs as the primary means of accessing the internet. Smartphone ownership will make significant inroads over the coming years. The Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG International in March 2012 estimated that the number of internet-enabled smartphones in India would reach 24 million in 2012, more than double the level of 2011. Rapid growth is projected to continue through 2016.

Active Internet-Enabled Smartphones in India, 2011-2016 (millions)

FICCI/KPMG projected that internet connections will shift from fixed to mobile over the next four years, with mobile internet hitting 392 million connections in 2016, dwarfing the 51 million fixed connections in that year.

The full report, “India Online: Defining the New 'Digital Class',” also answers these key questions:

  • Who makes up India’s online population and where is growth centered?
  • How important will fixed broadband access be in comparison to the mobile web?
  • How are people in India using the internet?
  • What challenges do online retailers face in India?
  • Where is ad spending in India focused?

This report is available to eMarketer corporate subscription clients only. Total Access clients, log in and view the report now.

Check out today’s other articles, “US Mobile Ad Spending Jumps to $4 Billion ” and “Native Mobile Display Ads Mean Big Bucks for Facebook.”


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