Why smartphone shipments are slipping in India
Diwali at a price less than Rs10,000, is likely to reverse the trend. Uncertain macroeconomic environment with high inflation, rising unemployment, low wage increases and a K-shaped recovery of the economy has forced consumers to hold on to their phones longer than ever. The inventory build-up also impacted shipments in Q1 and a rise in sale of refurbished phones has begun to impact sales of new phones as well.
The festive season begins next month. The industry has lined up a number of launches. Affordable 5G devices are expected, which will expand a segment that is already seeing a good demand.
Companies are also adapting to stronger offtake in offline stores. Another silver lining is that despite the tepid volumes, the average selling price of devices has gone up—revenue and profitability of the industry has improved. For the full year, sales are likely to fall short of 150 million units the industry totalled last year.
Sales have declined for 24 straight months and eight consecutive quarters with the second quarter of this year witnessing an 8% drop. In 2022, sales stood at 1.2 billion units, which was the lowest since 2013. The markets that are struggling the most are the US, western Europe and Japan.
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