Lockdown Might Not Affect Phone Demand And Make In India Program

The nationwide lockdown has affected the business of all smartphone manufacturers in the country as they have suspended the operations. Smartphone companies like Vivo, Oppo, Samsung, Xiaomi, and more have shut down their manufacturing plants until May 3.

For the unaware, there are more than 100 companies that have invested in the country, and now, it seems that they are in crisis as the Ministry of Home Affairs (MHA) has not considered mobile handsets in the essential item list. These companies have invested a lot under the Make in India program of the government, almost all handset makers have set up their assembly lines and plants in Noida, Chennai, and Andhra Pradesh. So, it is quite evident that this lockdown will affect revenue and production capabilities.

But, still, industry body ICEA believes that the demand for new smartphones will not go down in the near future. "People realize the great value of it now. So we do not see demand going down too much," Pankaj Mohindroo, Chairman, ICEA was quoted by IANS.

However, research firm TechArc expects that operations will start once the lockdown ends, but less demand will hit the sales for the entire 2020. It said that the smartphone industry should look at other services to fill the gap.

"Some brands like Apple, Samsung, Xiaomi, Realme, OPPO, Nokia HMD, and Lava have already set up services on top of the active user base. They need to further look for more paying services to narrow the gap between the potential earnings through the sale of hardware and the actual revenues they can realize in 2020," the firm said.

Manufacturing Plants Might Operate In Phased Manner

Meanwhile, The Mobile Indian has reported that manufacturing plants might start their operations in the phased approach. Similarly, research firm TechArc pointed out that the companies are expected to start only 30 to 40 percent production initially.

"It is relatively easy to get production back running, lack of labor may not affect them in the initial months," Faisal Kawoosa from TechArc said. Besides, Tarun Pathak from Counterpoint said that this lockdown is likely to impact the manufacturing sector by $3 to $4 billion.

Companies Are Losing Confidence In China

There is no doubt that the lockdown will affect the business and revenue. But, still, there are chances that more companies will invest in the country as most of them are planning to shift their operations from China to the other parts of the world.