Handset Makers To Further Increase Prices After Lockdown Ends: Report

Smartphone companies have recently increased the prices of devices due to new GST rates. Now, a new report suggests that handset makers are likely to increase the prices further. It said that there are chances that companies might do after the lockdown ends.

"Brands will be under immense pressure to find growth this year and will increase prices. The demand will continue to decline for a few quarters as consumers spend on essentials than buying phones. Revival will only start by end Q3'20 during festive times," Navkendar Singh, research director, IDC India, was quoted by Economic Times.

He believes that people will not spend money unnecessarily; this means that there will be fewer footfalls in the retail shops, and this will affect the business of the handsets makers. He said, "This can lead to prolonged replacement cycles, price increase by the brands a weaker than expected consumer demand throughout 2020."

On the other hand, the research firm IDC claims that e-commerce players will invest in their delivery and marketing services. "The last 4 months of the year will see huge marketing blitz across price points and channels. Of course, this is under the assumption that we see recovery by September timeframe, just in time for festival season kicks in," Singh added.

Furthermore, IDC predicted that smartphone production will fell by 20 and 25 percent this year due to COVID-19. It said that both smartphone and feature phone will decline up to five and 40 percent. Similarly, Counterpoint reported that the production is all set to decline as all assemblies are closed during the lockdown.

The firm said that the smartphone industry was doing well in the country, and it manages to capture 16 percent share in 2019 as against 9 percent in 2016. But, this year there are chances that the smartphone industry will again decline to 9 percent.

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