Indian smartphone market to decline by 15% in 2020

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 labour force due to the ongoing COVID-19 pandemic is said to be the cause of this decline.

Smartphone sales were at 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.

Consumer Mood not Upbeat

Experts involved in the tracking of sales have said that the layoffs and salary cuts have made consumers think twice before purchasing non-essential goods. Adding fuel to the fire, companies have been struggling to gather supplies. Logistics have also been a big issue.  

Hence, production has slowed down accordingly and companies are facing the heat with a less labour force. On top of this, the GST revisions have given them no other choice but to hike prices.

Further, Navkendar Singh, Research director at IDC has said that the current volatile and pessimistic view of the virus has spread among the public. This has led to supply issues at plants and unwillingness of users to upgrade their devices which inturn will impact the market.

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.

Smartphone and Feature Phone Market to be Hit

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.