Smartphone market hit by drop in consumer demand amid COVID-19 pandemic

The surging second wave of COVID-19 infections has impacted the smartphone market with a drop in consumer demand. This has resulted in bricks-and-mortar stores, including organized retail outlets, to shut shops or curtail operations.

Smartphone market tracking firms have sharply cut their shipment growth estimates for 2021 to either flat or just 1% growth year-on-year from an average 16% expansion forecast earlier. Strategy Analytics, a research firm, had previously estimated 2021 to record 170 million shipments. Now, it has lowered it by 10%, roughly the same as 2020.

Navkendar Singh, research director for client devices & IPDS at IDC India, said that the April-June quarter is expected to face severe growth challenges. He added that demand in the second half of this year won’t be as strong as last year. “However, IDC estimates the impact to be less pronounced compared with last year, with factories being operational today and only limited restrictions on logistics, transportation and state-level lockdowns instead of a nationwide lockdown,” he said.

IDC noted that the Indian smartphone market grew 18% year-on-year in the first quarter of 2021. However, the 38 million unit shipments the country saw in the first quarter were 14% lower than the fourth quarter of 2020. “Recovery in 2021 may not be as smooth as expected earlier, and while the industry will grow in the second half of the year, the degree of that growth will be restricted as people lower their discretionary spending,” Singh said. “Supply constraints and anticipated price hikes in components in upcoming quarters will affect the market.

Also Read: Solar PLI scheme to benefit 8-13% till 2030: Ind-Ra Report

Tech Arc has also estimates 2021 at 150 million, same as its figures for 2020. Faisal Kawoosa, founder and chief analyst at Tech Arc, said that in anticipation of a possible COVID-19 third wave, consumers will curtail spending and save for emergency healthcare expenses. “This festive season demand rebound may not be as great as last year because student and professionals have largely catered to their needs in the past three quarters,” he explained.