Second wave impact hurts Q1 smartphone shipments

India's smartphone market has contracted by 15-20% sequentially in the April-June due to closure of both offline and online sales channels and tepid consumer demand, market trackers estimated. They added that Vivo replaced Samsung as India’s second ranked smartphone brand in the just ended quarter, with Xiaomi continuing as the market leader.

The second quarter recorded 30-32 million smartphone shipments, down from all-time high first quarter shipments of 38 million, according to preliminary numbers shared by leading market trackers including Counterpoint Research, International Data Corporation (IDC) and CyberMedia Research (CMR).

A fast-paced recovery due to the pent-up demand in June supported quarterly shipments, after April and May were practically washed out, experts added.


On year smartphone sales grew 64% from 18.2 million recorded in the second quarter of last year, which entailed a strict countrywide lockdown of 45 days.

“There will be degrowth in Q2 compared to previous quarter since supply chain constraints are yet to ease out and discretionary spends remained low,” said Upasana Joshi, associate research manager at IDC, which estimates 32 million shipments in Q2.

Prabhu Ram, head-Industry intelligence group at CMR, said its early estimates point to a potential 15-18% on-quarter dip in shipments.

During the period, Chinese brand Vivo has overtaken Korean rival Samsung by 200,000-300,000 shipments to capture the second position in India's smartphone market after five continuous quarters, data showed.

“We strongly believe the smartphone market will be back on track in H2 2021, driven by strong push from mobile phone brands, earlier-than-usual festive sales, and potential consumer demand,” Ram said.

Top brands and their online partners Amazon and Flipkart have already started offering deals and discounts to clear out the inventory pile-up of the last few months and push consumer demand in the build-up to the crucial festive season that usually accounts for a third of annual sales.

However, some analysts expect a milder second half of 2021 compared to 2020 when shipments crossed a record breaking 100 million units in six months, given the ongoing supply chain challenges and an anticipated covid third wave.

A global shortage of handset components like chipsets, display panels and memory chips have jacked up the bill of materials of a smartphone, contracting margins for major brands. Xiaomi, RealMe and Vivo, this month, hiked the prices of their latest models by Rs 500-Rs 1000 and warned about further price escalation in coming months.

For the whole year, estimates point that the market will remain flat at 150 million shipments, equal to calendar year 2020 and 2019.