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Handset Sales Seen Falling Up To 30% In April-June

Mobile handset sales in the country are set to fall 8-15% in the current quarter and by up to 30% in the quarter ending June when the full impact on supply chain due to the Covid-19 outbreak will show up, analysts say.

Market intelligence firm TechArc has predicted 25-30% on-quarter decline in April-June sales as inventory replenishment will not happen at the desired rate owing to supply chain issue starting end of February, while International Data Corporation (IDC) has lowered its shipment estimates for the current quarter ending this month.

CyberMedia Research (CMR) said handset shipment in the first quarter of the calendar year could see a potential decline of 8-10% while there is possibility of full-blown sharper impact on the smartphone market in the second quarter. Counterpoint Research estimates that overall India shipments will be down 15% this quarter.

“If the Covid-19 situation remains critical, the India smartphone market will be further impacted, especially the first two months of June ending quarter,” said Prachir Singh, senior research analyst at Counterpoint Research.

According to CMR’s numbers, both smartphone and feature phone shipments grew in January and had remained stable through February 2020. “Thus far, smartphone brands have been able to sail high, thanks to an adequate stock of smartphone components in anticipation of the Chinese New Year,” said Prabhu Ram, head of the industry intelligence group at CMR.

Analysts predicted sales of 31-32 million phones in the country in the first quarter, giving flat growth on year and a cyclical decline sequentially.

“The impact on smartphone sales in the current quarter was moderated by the sellout of previous year’s festive inventory pile up in the offline segment,” said Upasana Joshi, associate research manager at IDC. However, if the revival in the supply chain does not start by mid-next quarter, there might be a significant on year drop in sales, she said.

Handset players in India, including major Chinese brands such as Xiaomi, Oppo, Vivo and OnePlus, assemble their devices within the country but are heavily dependent on China for parts such as display, battery, memory and printed circuit boards. Battery and some camera modules are made in Vietnam, while displays and connectors are majorly made in China. Chips are made in Taiwan but are sent to China for the final buildup.

At Wuhan, the Chinese city that is the epicentre of the Covid-19 outbreak, major component factories are currently running at 40% of their capacity. Although the extended Lunar New Year holiday ended on February 9, many workers still haven’t returned to work, according to reports.

―Business Telegraph

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