Coronavirus outbreak: Mobile sales hit as buyers stay away

By: |
Published: April 1, 2020 2:00 AM

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.

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

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.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Partial relief for industries during 10-day Aurangabad lockdown
2Lakshmi Vilas Bank: Clix amalgamation may bring in Rs 1,900 crore
3Supreme Court notice to GVK, MIAL on ACSA’s plea for appointment of arbitrator