Smartphone sales may contract this year again, improved quality to blame

Quality phones available at affordable prices have resulted in people using their phones for a longer period of time

India's smartphone market going through a tough phase as the sales are set to contract for the second year in a row, Mint has reported. This is the first time that the sales of smartphones have gone down after it started expanding 14 years ago, the report cited data from three market research firms.

Smartphone shipments crossed the 100-million mark in 2015 for the first time and peaked at 160 million in 2021 but started to dwindle by 10 per cent to 144 million in 2022. The newspaper cited data from IDC, a market research firm, that the shipments are expected to fall further by 2-6 per cent and reach 135-140 million in 2023. Research manager at IDC India, Upasna Joshi told Mint that the average sale price of smartphones has jumped about 30 per cent in the last two years, which may have affected final sales to consumers.

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Smartphone shipments in the January-June period were about 10 per cent down from the same period last year, bad news for smartphone manufacturers as the retailers buy more phones anticipating increased consumer demand ahead of the festive season.

In the wake of the dip in sales, vendors, and manufacturers are limiting their supplies to retailers and are likely to give discounts with sales beginning in August, much before the festive season that starts around Diwali, the Mint report said.

Among major smartphone manufacturers, Xiaomi has already reduced the number of devices it plans to launch this year. The company would rather focus on affordable 5G devices in the range of Rs 10,000-15,000, a company official told Mint.

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Another reason for the dip in sales is that users are holding on to their devices much longer than earlier, a top official at a telecom company said. This may be primarily due to better quality phones being available at affordable prices, the official added.