While the outbreak of COVID-19 and the ensuing lockdown across the country has pushed up mobile talktime and data usage, it has taken a toll on sales of handsets.

Shipments are expected to decline by around 27% on a year-on-year (y-o-y) basis during March and a sharper 60% in April, according to analyst estimates.

Sales have also taken a hit as online channels, which account for 40-50% of total sales, are closed at the moment as mobile handsets do not fall in the list of essential commodities.

Counterpoint Research has estimated that annual shipments are expected to decline 3% y-o-y to 153 million units in 2020. This is lower than 158 million units shipped during the 2019 calendar year (CY), when India surpassed the US as the world’s second-largest smartphone market.

“The effect on India was relatively mild until mid-March. However, the outbreak is spreading and the country has been locked down. We estimate the Indian smartphone market will experience a decline of 3% y-o-y to reach 153 million units in 2020, Counterpoint Research associate director Tarun Pathak told FE.

He further said going ahead, demand for smartphones is expected to be tepid as people would prioritise spends and focus on essential items and cut discretionary spending. In such a scenario, the second half of the year would give an indication of how demand would fare. In the event of the situation stabilising by that period, the festive season may offer some hope.

“We are estimating a 27% y-o-y decline in March shipments and almost 60% for April if the lockdown does not get extended beyond April 14. This translates into a revenue loss of around $2 billion for the industry. If it extends, the losses would be higher which could affect the entire supply chain and the channels in terms of revenue, payments as well,” Pathak added.

On the production side, he pointed out that both domestic and exports will have almost full 20 days of impact.

“This will also impact component supply chain in China as well which are supplying to their Indian counterparts as well. Factories with their export base in India are also likely to be impacted more. However, we believe that factories are likely to take care of their labour and restrain from any layoff during these testing times,” he added.