Smartphone industry set for smart growth over the New Year; shipments likely to reach 190-200 million
When the pandemic forced people to stay indoors, smartphones became their window to the world, helping them stay in touch with friends, work from home (WFH), and even learn new recipes. As people embraced hybrid working models, rushed to web series, and spun countless “reels” for entertainment, the demand for smartphones increased dramatically even as supply faced challenges.
According to Counterpoint Research analyst Shilpi Jain, the Indian smartphone market has experienced a steady growth curve over the past five years, growing continuously to reach 158 million units in 2019.
“The impact of COVID-19 has seen the market experience a minor decline demonstrating its resilience. The market is now poised for a period of accelerated growth realizing the true potential of the Indian market in the years to come, crossing the 200 million mark in 2022, “she said. noted.
CyberMedia Research (CMR) – Industry Intelligence Group analyst Anand Priya Singh estimated that smartphone shipments would hover around a similar level of 187-190 million in 2022 with a further increase in 5G device shipments, increasing by 129% compared to 28 million in 2021 to around 64 million in 2022.
Singh said there had been an 11% year-over-year growth in smartphone shipments, from 150 million in 2020 to 167-168 million in 2021.
Although 5G networks are not yet available, industry watchers say 5G smartphones are in demand as consumers see 5G as one of their top 3 priorities when buying smartphones.
Realme India CEO Madhav Sheth said conversations around 5G technology and devices have been heated since 2019 and smartphone makers introduced 5G devices in early 2020.
âGiven that 5G trials are slated for 2022 and spectrum auctions are expected to take place in the second half of 2022, we expect higher demand for 5G devices in the coming year. Realme aims to be a 5G leader and a democratizer in India, and will therefore equip all smartphones above Rs 15,000 with 5G. We are also working to bring this technology to the segment below Rs 10,000 â, he added.
The global semiconductor shortage impacted the Indian smartphone market in the second half of the year. During the holiday season and the third quarter, consumer demand exceeded supply.
“We believe that shipments could have been 10-15% higher in the third quarter of 2021. The semiconductor shortage will continue to affect the Indian smartphone market in 2022, however, we believe the situation will improve in the next quarter. during the second half of the year, âsaid Jain of Counterpoint.
Xiaomi India Commercial Director Raghu Reddy noted that over the past two years the market has witnessed an increase in the prices of components such as chipsets, batteries and memory chips used by all manufacturers. of smartphones.
âThis, in turn, has had an impact on the price of smartphones and has led to an inevitable increase in the prices of SKUs (inventory holding units) … Although there continues to be a huge gap between the demand and supply, we tried to fill part of it. making a good impression on our Make in India initiative, âhe added.
Prices for electronic components have increased by around 20% due to disruption of the global supply chain due to the semiconductor shortage and the COVID pandemic restricting the flow of goods.
Sheth of Realme explained that over the past two years the smartphone industry has faced multiple challenges, with the chipset shortage being one of the most recent.
âThe third quarter of 2021 saw a drop in shipments and a similar drop is expected in the fourth quarter. Supply chain shortages have also led brands to postpone new product launches and have caused smartphone prices to rise slightly for consumers despite brands doing their best to absorb them internally, âhe said. -he adds.
Sheth said that since the start of this shortage, Realme has been researching and working on collaborations with chip makers who can provide us with processors without compromising performance. The chip shortage is expected to ease in the second quarter of 2022.
While Xiaomi and Samsung occupied the top two places in the smartphone market,
, Realme and Oppo occupied the next three positions. OnePlus, Samsung and Apple wowed customers with their premium wallets.
Retail ASP (Average Selling Price) is expected to increase 13% year-over-year in 2021, according to Counterpoint, as smartphone volumes move into higher price segments.
In December, the government approved a program of Rs 76,000 crore to boost semiconductor and display manufacturing in the country with the aim of positioning India as a global hub for the production of high technology and d ‘attract the big chipmakers.
This move would strengthen India’s ambitions to be self-sufficient in manufacturing electronics, bring massive investment and translate into 35,000 skilled jobs, in addition to indirect jobs for a lakh.
Other segments like smart TVs and TWS (headphones) have also experienced significant growth due to the increasing accessibility of these products.
Smart TVs hold around 85% of the overall TV market and the research firm expects it to continue to grow.
âAccording to our forecasts, the Indian smart TV market is expected to grow by 30% in 2022. The post-pandemic economic recovery and the entry of new players into the market will facilitate this growth,â noted Jain.
The New Year promises to be a treat, as consumers will have access not only to more stylish, amazing and powerful smartphones, but also to more IoT (Internet of Things) enabled devices at various price points.