Ahead of festive season, Indian smartphone market showing recovery: Report

The Indian smartphone market is beginning to show signs of recovery as the inventory situation improves ahead of the festive season, along with declining inflation and increased demand for 5G handsets due to affordable launches, reported The Economic Times (ET).

Market trackers Counterpoint Research, IDC India, and CMR India estimated smartphone shipments in the second quarter ended June at 34-36 million units.

Meanwhile, preliminary data from Counterpoint show a reduction of about six per cent year-on-year (YoY), which is better than the 19 per cent decline reported in the first quarter. 

It also said that shipments in the second quarter are likely to have risen by around 11 per cent sequentially.

Another market researcher, Canalys, forecasts sequential growth of around one or two per cent in the second quarter.

Revival in consumer demand

The research firms attribute the halt in shipment decline to a revival in consumer demand as macroeconomic factors improve, and they expect pent-up demand from last year to kick in the last two quarters as inflation falls and markets prepare for an upgrade cycle for a large number of consumers who purchased smartphones during the pandemic.

This is likely to play out more during the holiday season when there are numerous rounds of sales and promotions with substantial discounts and offers.

Consumers are now waiting for promotional periods to acquire cellphones with the best deals, said Shilpi Jain, senior research analyst at Counterpoint Research.

Growth in shipment

Inflation levels touched a two-year low in May, opening up consumer purses, while June witnessed increasing footfalls in offline stores, with the likes of Oppo and Vivo enjoying a growth spike, said Counterpoint Research.

Samsung is expected to again top the market in the second quarter, followed by Vivo, but with flattish growth for both, it said.

Xiaomi and Realme saw sequential growth in Q2 shipments after experiencing severe declines in the first quarter, it added.

Shipment growth is also being driven by rising demand for 5G handsets, which surpassed the 100 million shipment milestone for the first time in May as a result of many low-cost 5G devices introduced in the Rs 10,000-15,000 price range.

This has lowered the overall average selling price (ASP) of smartphones from $274 in the first quarter to $257 in the April-May period.

The ASP for 5G smartphones itself saw a steep 13.3 per cent decline to $391 in the April-May period, said Counterpoint Reseach.