Indian Smartphone Industry Might See 20% Decline In 2020

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IDC has recently issued a report, where it suggests that the Indian smartphone market has managed to post 1.5 percent year-on-year growth in the Q1 2020, despite the lockdown and COVID-19 crisis. In fact, companies even suspended their operations in their plants.

Indian Smartphone Industry Might See 20% Decline In 2020

 

However, research firms, such as IDC and Counterpoint, have again projected that smartphone sales in the country are expected to decline by 13 to 15 percent this year, which means that this might be the first time that industry will see a huge decline.

On the other hand, research firm Tech Arc states that earlier there were projections that sales might decline by 10 to 12 percent. But, now we believe that decline will be between 16 to 18 percent. The firm states that the sales of the first half of this year could be around 50 to 55 million instead of 65 to 70 million.

"On the whole, we expect the sales to decline as high as 20 percent in 2020 if the sales trend as per 1H pattern. Though there could be some improvement in 2nd half that should not be substantial. Against our projected sales of 162 million smartphones in 2020, we shouldn't be surprised to see 130-135 million smartphones selling in 2020," Faisal Kawoosa, founder of research firm techARC informed Gizbot.

Meanwhile, both IDC and Counterpoint believes that job loss and salary cuts have forced people to buy only essential items, and that's why they have postponed smartphone purchases. Besides, the hike in goods and services tax to 18 percent will affect the industry as companies have increased the prices by Rs. 2,000 to Rs. 6,000.

"The sub-Rs 10,000 segments will take a hit, while Rs 10,000-25,000 segment may still sell but will not be able to make up for the lost ground. The current pent-up demand will taper-off by June," IDC India research director Navkendar Singh was quoted by Economic Times.

 

He said there will be supply issues as manufacturing plants are not working properly due to the lockdown. In addition, people are not planning to buy new handsets. Similarly, Tarun Pathak from Counterpoint suggested that people are losing jobs every month. So, there are chances that smartphone buyers might shift their plans to buy new devices in 2021.

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