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Smartphone sales to surge this year, despite dip in shipment

New launches expected to go up by at least 20% to 600 models, from 500 on yearly basis

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Smartphone

Arnab Dutta  |  New Delhi 

Smartphones driving enterprise mobility

The smartphone market in India is poised to grow by 35 per cent during 2016, despite slowing shipment growth in the January-March quarter.

Following the trend that emerged last year, new launches are expected to go up by at least 20 per cent to 600 models, from 500 on a year on year basis, analysts tracking the sector said.

During the quarter ended March, shipment of smartphones in India declined 8.2 per cent from the earlier one. Though up five per cent over a year, markedly lower than the estimated growth rate for the full year. Experts, however, remain optimistic about sector volume touching 140 million by the end of this year. Various factors which affected shipment growth during the quarter might not ruin the party in the year’s second half.

Last year, India emerged as the second largest smartphones market in the world, with 103 mn units sold.

“It is observed that almost 65 per cent of the total annual sales in India take place after July. Consumers usually postpone purchases of non-essential items like smartphones early in the year,” said Tarun Pathak, senior telecom analyst, Counterpoint Technology Market Research.

Smartphone sales to surge this year, despite dip in shipment
Since a majority of the flagship device launches from prominent brands take place during the second half of the year, sale of smartphones remain subdued during the first half. Higher spending by consumers during the festive months of September-December is targeted by handset companies. Also, discounts and offers that are exclusive to the festive season drive volume sale for the sector.

Another factor that brought down shipment of smartphones earlier in the year is a bigger than estimated inventory that many of the major players had shopped in during the October-December quarter last year. “In anticipation of record sales, many vendors imported handsets during the latter part of 2015. However, sales did not pick up as expected and many found themselves with huge inventories,” said Faisal Kawoosa, general manager at CyberMedia Research.

According to IDC, shipments of key Indian vendors Micromax, Intex and Lava put together dropped 20.4 per cent sequentially as they struggled to push their inventories into the market.

“Since focus has shifted towards manufacturing locally, many of the Indian vendors have performed poorly. Earlier, their entire energy was channelised to marketing and sale of devices and now, at least some of them are finding it hard to balance both (manufacturing and sales),” a sector analyst told this newspaper.

According to those in the sector, as sales pick up in the coming quarters, shipment of smartphones will grow. Consumers moving from feature phones to smartphones will pick up at a faster pace than last year, as the fourth-generation technology (4G) service network availability improves after July.

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First Published: Thu, May 19 2016. 00:32 IST
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