India is the largest market for handsets after China. The sale of smartphones in 2019 increased by 12% and projections about a 14% increase in 2020 were made. This research includes existing customers who want to upgrade their self, customers who want to improvise on the technologies they use. One major increment will be of the people who have understood the importance of a smartphone because of the pandemic. Everything is happening through a cell phone right now. You can order groceries, you can call the hospital, you can get your health test done, make bill payments, and even get educated through your smartphone.
Humans need to communicate had already driven the success of this industry. The mixture of telephone and Internet increased the organic growth by tenfold.
But when we talk about the situation right now, it is expected that the growth rate of the smartphone market will reduce segment-wise. This will happen because the income of the people has reduced and many of them have been rendered unemployed. In the January-March quarter, the total smartphone shipments in the country increased by 4% only.
Prabhu Ram, head of the industry intelligence group of CMR said that they are keeping a close tab on the macroeconomic factors and how the industry will play from here. In the best-case scenario there will be a decline of about 11% in overall smartphone shipments for this year.
It is said that Samsung has been the worst-hit company in India’s smartphone market. The share of Samsung smartphone in the market Dropped by 16% in the first quarter. Samsung is facing a lot of competition from Chinese companies. Vivo grew by 45% and became the second-largest brand of the smartphone market in India with a 17% market share. Samsung has partnered with technological companies to launch a new digital platform so that customers can buy Samsung smartphones online from local retailers.
Cell phone companies are suffering a double hit by the lockdown. There have been supply chain issues because direct investment from the Chinese has been monitored. Secondly because of the economic impact of the lockdown, the disposable income of the people is reducing so they would not purchase high-quality smartphones. Unless absolutely necessary, consumers won’t buy because they will choose to conserve their resources.
Cell phone companies like Vivo, Realme, and Xiaomi are struggling to sell their stock. They are not launching new devices because the Indian market is not permitting them to do so. If your cell phone stops working right now you’ll be in a lot of trouble!
Smartphones are very critical and very essential right now. There have been various requests by people but due to the supply chain, be able to be fulfilled right now. I’m looking at the future, there might be a low trend in this market because of the shortage of income of the people. Demand for lower-priced smartphones will increase. 43% of parents don’t have access to smartphones today and this is because of the budgetary constraints. This is not going to become better in the near future.
This industry will take its own pace to be mended.
After the lockdown ends fully, companies will flood the market with their cell phones. They will start making cell phones which are of low price but have many technologies embedded in them. Launches of new smartphone and new prices will take place only after the already existing smartphones are sold. No company wants to operate in losses. There has been a 6% GST hike on mobile phones. This will cause a lot of damage. The pent-up consumer demand will be high, new demand will arise later on but for mid-level smartphones and not for high-priced cellphones.
These demand and supply shocks and determine the efficiency of the industry.
It is also said that consumers would get into more research and only then they would purchase smartphones. Now more features will be required in even a basic level smartphone. With the increasing competition in this market, new technologies need to be developed which reduce the cost of the smartphone and benefit the seller as well as the buyer.
Mobile phone shipments from China will drop severely. 2020 was supposed to be a strong year for the mobile industry because of the 5G technology coming in. But because of the financial struggles and various FDI policies, imports of mobile phones will be reduced from China. Even when we look at the data which is given out from China, the first country which had the effect of coronavirus and came out of it, the demand for cell phones has reduced in China. Data from other countries also suggests that a similar decline will continue.
We can only say this that in India the decline will take place and low-level smartphones will be sold.
People have realized the great value of smartphones. The entry-level smartphones which are under Rs.10,000 will be well-positioned. Mid-level and high-level smartphones will face challenges. There has been a fall of rupee against the dollar which will also increase the prices of smartphones. This might be a huge challenge. Indian companies will eventually be able To tackle the global counterparts. The biggest concern would be the cash flow. Revenues may not be like before and overheads will continue to be there. These are tough times but if this industry survives this time, there is a bright future ahead.
Confidence in China has gone down tremendously and make in India will get a boost. India had already surpassed the United States of America to become the second-largest smartphone market globally after China. Now the smartphone market in India has a bleak future with little growth ahead but it will be the same situation for everyone all over the globe.