Smartphone shipments may fall 10%-15%in Q1 – Times of India

1


CHENNAI: The second wave of the pandemic and resulting restrictions in Delhi, Mumbai and other locations is likely to dent smartphone shipments by almost 10%-15% in the period April-June as sales in these cities account for almost one-fourth of the total market. This will result in a loss of around 5 million units, estimates market tracker Counterpoint Research.
However, the research firm said it is keeping its annual forecast for the year unchanged for now.
“This estimate factors in that more states will likely have partial lockdowns. Smartphone demand is generally resilient and there are other variables at play like e-learning that may drive sales,” Tarun Pathak, director, Counterpoint Research, said.
In April to June of 2020, India’s smartphone shipments declined by 51% year-on-year, as per Counterpoint’s data. While the nationwide lockdown wiped out shipments during April, pent-up demand helped lift May and June numbers. Prabhu Ram, head of industry intelligence, CMR, said the challenge for the smartphone makers is likely to be two-pronged stemming from both local Covid-related curfews in key markets as well as global supply chain hurdles leading to a shortage of components.
“We currently anticipate a dip of 3-5 million in smartphone shipments in Q2 2021 (roughly 8-10%) owing to lockdown in key cities. If smartphone production were to get stalled in Noida, it would dent the impressive rebound that the industry enjoyed,” he said. Samsung, Xiaomi, Vivo, Oppo all have their production hubs in Noida.
On the retail side, the industry’s biggest slump is likely to come from the fact that e-commerce firms are only allowed to deliver essentials in key markets Delhi and Mumbai and e-retail currently contributes to almost 45% of the total smartphone sales. Demand is also likely to suffer as a result of increasing prices, a mobile retailer in Chennai said. “The component shortage has forced brands to decide to pass on cost to customers, and smartphone price hikes are set to take effect in the coming weeks,” the person said.
Offline retail of smartphones too has been struggling for a year now. Arvinder Khurana, national president, All-India Mobile Retailers Association, said consumer behavior has changed drastically in favour of buying gadgets online and brands too have favored exclusive tie-ups with e-commerce sites, putting smartphone retailers in hard times.
“Our business has already dropped by around 60% and if e-commerce is allowed to sell non-essentials like mobiles during the current restrictions, then many stores may never re-open post the lockdown,” he said.
The real acid test would be to see how the situation is in May as that is typically the peak in the April-June quarter, Faisal Kawoosa, founder of research firm techARC said. “Last year, people scrambled for digital devices for a variety of uses but there is no major trigger this time in terms of pent-up demand and sentiment is down,” he said.



Source link

  •  
  •  
  •  
  •  
  •