Indian smartphone market could decline by 13-15% according to reports by research firms Counterpoint and IDC. The recent trends of salary cuts and lack of labor force due to the ongoing COVID-19 pandemic are said to be the cause of this decline. Smartphone sales were at a peak just before the Indian Government revised the GST regulations. This increased the tax on smartphones from 12% to 18% last month. This, followed by the outbreak of the virus in the country has worsened things further.
IDC has now projected the smartphone market in India could hit as low as 130 million handsets as compared to an earlier estimate of 140 million. Counterpoint has just revised its outlook pegging the industry at 137 million from an earlier outlook of 142 million. Last year, India had sold around 154-158 million smartphones, and before COVID trackers had expected high single-digit growth this year.
In the case of feature phones, the decline in sales is estimated to be a steep 42% from 130 million handsets sold last year to around 75 million with the income of this set of consumers badly hit, as per IDC.
IDC India research director Navkendar Singh said the situation is very volatile and a pessimistic view has been taken due to extended lockdowns, plants not able to operate whereby there are supply issues, and consumers not eager to upgrade handsets. These will impact the replacement market which has been driving smartphone sales since 2017, he said.
He further added that the smartphones below Rs.10,000 may take a hit while the 10k-25k segment could sell though it may not meet last years’ stats. He also hoped that the current oscillation in demand will wear off by June.
IDC has also pointed out that the smartphone market could hit a low 130 million this year. Earlier estimates of 140 million have taken a serious toll. The feature phones’ decline will be even worse to a drastic 42% decline from last year.
Counterpoint’s Associate Director Tarun Pathak said that factories running at 20-30% capacity may not pick up the pace for now. Hence, the unemployment rate will go up reducing the purchasing power of the people drastically.
Counterpoint’s estimates also indicate that the shipments could toggle around 137 Million devices. This would indicate a steady decline in recent years. However, folks at Gfk have shown positive signs with their estimates indicating a peak in sales during the festive seasons later this year.
Managing director of GFK, Nikil Mathur, said that Indian customers are more optimistic than others and purchases could get delayed, but not cancelled. To sum up, experts have predicted a rise in demand around October-December this year. If this fails, it will mean a heavy strike on overall shipments.