Just as China's long-insatiable appetite for smartphones wanes, India promises to be the next hot spot for explosive growth, a new report claims.

"India presents the world's largest smartphone growth potential for the next 5 years," Mark Li, senior analyst at Bernstein Research said in a report titled India: The Next China for Smartphones?

The South Asian nation is already the world's third largest smartphone market behind China. However, it is forecast to more than double its smartphone shipments in the next 5 years, overtaking the U.S. to become the world's second biggest market.

"This forecast is not aggressive, because even by then, the smartphone penetration will still be just around 35 percent, below the level in China and Brazil today," Li said.

India vs China

Smartphone manufactures will however need to deploy a different strategy to that used in neighboring China.

The Indian smartphone market is characterized by low average selling prices (ASPs), slow technology migration and a high reliance on retail channels. The bulk of the smartphone growth comes from the below-$100 segment. Last year, over 40 percent of handsets sold in the country were priced under $100, and that proportion is expected to surpass 50 percent in the next five years.

"This is much lower than the ASP in China or Indonesia, let alone developed countries," Li said. "Unlike in China or developed markets, operators provide little handset subsidy and account for only 4.5 percent of India's market," he said.

