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Smartphone buying cycle extended to 24 months since pandemic

Smartphone maker Realme has said that the buying cycle has gone up to 24 months during the Covid, from the 16-month cycle before the pandemic. The trend may continue for the whole of 2022.

However, with the launch of more 5G devices in future, the buying cycle may come down again to 16-18 months from 2023 onwards, a top official at Realme said.

“The industry replacement cycle for the next phone has gone up globally. It used to be 16-18 months on an average, and has moved to 24 months now, meaning the cycle has moved ahead within six months. The demand is getting postponed,” Madhav Sheth, Chief Executive Officer, Realme India, and President, Realme International Business Group told BusinessLine.

Having said that, he added that it was not that the industry was not doing well because of the change in the buying cycle. In fact, technically the industry has moved ahead within these six months and will be quite relaxed for the next six months. And that despite the semiconductor shortage globally, smartphone industry is not affected.

“Therefore, I believe that now, product differentiations and the reason to buy will be extremely important factors again. I have to give consumers a reason to upgrade their phone. If there is no reason, consumers will stick to the same phone. An upgrade has to make more sense as consumers are getting smarter,” he said.

The trend has been always towards performance and designs, which Realme has always strived for, but how to differentiate at a particular price is the most important thing now, Sheth said.

“More than 50 per cent of our portfolio is already 5G now. Digitalisation is the future and we have to give the customers durable devices, with better chipsets. Moving towards 5G is all about performance because 4G chipsets are at their end of life globally,” Sheth added.

According to Counterpoint Research’s latest Global Smartphone Quarterly Shipment Forecast, total smartphone units shipped globally in 2022 are expected to fall three per cent year-on-year (y-o-y) to 1.36 billion units. The overall supply situation is expected to gradually improve in 2022 compared to the previous year, although shortages of several parts have not been resolved yet.

In India, the smartphone shipments declined one per cent y-o-y to reach over 38 million units in the first quarter of this year, according to the Counterpoint’s Market Monitor service. Supply constraints due to the ongoing component shortages and demand decline during the third Covid-19 wave led to this decline, it added. The Hindu BusinessLine

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