After record October sales, smartphone market will witness lean period in Nov-Dec: IDC

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December 19, 2020 12:30 AM

Smartphone shipments rose 42% year on year in October driven by multiple online festival sales and continuing pent-up demand from Q3 2020. The shipment figure of 21 million units was the highest ever for October and the second highest for a month, after 23 million units were shipped in September 2020 — an all-time high for a single month.

IDC India associate research manager (client devices) Upasana Joshi said while 140 million smartphones were sold in India in 2019, IDC expects 2020 to exit with a single-digit decline in final sales to consumers.IDC India associate research manager (client devices) Upasana Joshi said while 140 million smartphones were sold in India in 2019, IDC expects 2020 to exit with a single-digit decline in final sales to consumers.

October was a rewarding month for the domestic smartphone market as not only did vendors sell a record 22 million handsets, but also shipments hit a high of 21 million units, said IDC India. It warned however that November and December will be lean due to the cyclical dip.

Smartphone shipments rose 42% year on year in October driven by multiple online festival sales and continuing pent-up demand from Q3 2020. The shipment figure of 21 million units was the highest ever for October and the second highest for a month, after 23 million units were shipped in September 2020 — an all-time high for a single month.

IDC India associate research manager (client devices) Upasana Joshi said while 140 million smartphones were sold in India in 2019, IDC expects 2020 to exit with a single-digit decline in final sales to consumers.

“Though the first half of Q4 2020 will witness high sales owing to festivities, the second half will be lean with a cyclical dip as inventory cycles normalise and stocks get replenished. With the smartphone market still concentrated around the leading 50-70 cities of India, the industry must address the untapped potential in lower tier cities with affordable entry-level offerings to offset the large feature phone base and ensure steady year-over-year organic growth in upcoming years,” she said.

According to IDC’s India monthly city-level smartphone tracker, which tracks sell-out units (final sale to consumers) for 50 leading cities and the rest of states, a record 22 million smartphones were sold in October, registering a strong 38% year-on-year growth driven by consumer purchases in the pre-Diwali month.

“Twenty-five per cent of the market sat in top tier cities, namely New Delhi, Mumbai, Bengaluru, Chennai and Kolkata, registering more than 50% year-on-year growth in October. E-learning initiatives fuelled demand in bigger cities,” IDC said.

The next set of emerging markets — Jaipur, Gurgaon, Chandigarh, Lucknow, Bhopal and Coimbatore — also grew by around 50% year on year. However, the rest of states (up-country markets) registered slower growth (average around 25%), primarily owing to looming economic concerns and consumer spending narrowing to essentials only, it said.

The leading 50 cities accounted for around 55% demand nationally. The remainder is in the next set of evolving towns and cities, with huge untapped potential in the up-country geographies (feature phone-heavy markets).

Despite delayed deliveries due to restrictions in several zones, online purchases, especially on third party e-tailer platforms, registered 23% year-on-year growth with a 50% share. Bigger cities leaned heavily towards online channels, with 57% online share in the top five metros. But supply constraints remained, impacting offline channel sales as a result of fewer retail walk-ins.

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