Market research agencies IDC and Canalys have said the domestic smartphone market during July-December 2021 is unlikely to see the surge in pent-up demand witnessed during the same period last year.
For the second half of this calendar year, the Indian smartphone market is unlikely to see a repeat of the record-breaking shipments which began from July-December 2020. Analysts attribute this drop to the uncertainties surrounding the third wave of Covid-19, component shortages and rising prices of raw materials.
Market research agencies IDC and Canalys have said the domestic smartphone market during July-December 2021 is unlikely to see the surge in pent-up demand witnessed during the same period last year. During April-June 2021, the huge surge in Covid-19 infections resulted in movement restrictions and economic disruptions impacting consumer confidence.
IDC India research director (client devices & IPDS), Navkendar Singh said, “While 2021 is expected to see single-digit growth, H2 2021 is likely to drop in comparison to the same period last year, with lower demand, uncertainties around the third wave, persistent supply constraints, and rising component prices along with intensifying inflationary rates.”
Nevertheless, a rebound in 2022 will be possible with upgraders in the low-mid price segments, supply-led push of 5G devices, feature phone migration with new offerings expected in upcoming months (as announced by Reliance Jio), and better supplies to market, he added.
Canalys analyst Sanyam Chaurasia, too, pointed out the impact on shipments going ahead. The second half will not see a surge in pent-up demand like last year. The threat of a third wave still looms in India, but as citizen behaviour and industrial operations continue to adapt to pandemic conditions, its impact should be minimal.
“Increasing costs will be challenging, amid limited component supply, rising shipping charges and a tough macroeconomic environment. In the short term, vendors will bear the impact of supply chain disruption, and will be conservative about raising prices. But the component shortage also brings another risk – regional deprioritisation – as brands look to allocate their limited supplies of devices to more lucrative markets,” he added.
Overall, the smartphone market finished 2020 with nearly 145 million units compared with 148 million units in 2019, marking the world’s second-largest smartphone market’s first full-year decline in history. However, following a record high quarter in Q3 2020 driven by strong sell-in preparation of holiday promotions, shipments in India during Q4 2020 stood at 43.9 million units, a healthy growth of 13% over Q4 2019, Canalys said.