India’s smartphone sales to recover in festive season

India’s smartphone sales to recover in festive season
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The Indian smartphone sales which were impacted due to the lock down is likely to bounce back in the second half of the year due to the festive sales in the country. During the festive quarter majority of the consumers are likely to buy low-end and mid-range devices which will boost mobile phone sales.

According to the latest report by analyst firm International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker, the country’s smartphone market registered a sharp year-over-year (YoY) decline of approximately about 50.6 percent in the second quarter to 18.2 million units. The major reason for the drop in the sales numbers was due to lock down in the first half of the quarter.

The analyst firm also said the vendors faced major supply chain disruptions at the beginning of the quarter, and the shortage continued into the rest of the quarter as factories operated at partial capacity even after the lock down was lifted.

Samsung led the overall mobile phone market with a market share of 24 percent followed by Xiaomi and Vivo.

“By June, sales increased mainly due to the pent-up demand from the lock down period. However, purchases were mainly driven by availability rather than by choice,” stated an IDC report released on Friday.

The online channel registered a high market share of 44.8 percent but declined 39.9 percent YoY in unit terms due to lock down restrictions on the delivery of electronics as well as severely limited stock for most of the quarter.

The average selling price of smartphones remained flat at $161 in the second quarter of 2020. The brands were forced to increase prices due to the GST hike in April and the depreciating rupee.

On segmental basis phones which falls in the sub-US$100 segments increased to 29 percent share in the second quarter from 20 percent a year ago. The $200-300 segment fell 71.6 percent YoY. Meanwhile, the feature phone shipments declined by about 69 percent YoY to 10 million units in the second quarter of the year, leading to a contribution of 35.5 percent to the overall mobile market.

Navkendar Singh, Research Director, IDC India said: ‘The ongoing supply chain challenges forced the brands to go for direct imports to meet the pent-up demand post-lock down, especially in June, adding extra cost pressures. Further, this surge in demand is expected to continue throughout the first half of 3Q20 as well, requiring a steady supply of devices in the market.”

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