Smartphone shipments to be subdued in Q2 2021: IDC India

Feature phone shipments declined by 8% year on year, despite Reliance Jio launching its new 4G device bundled with telco offers.

The ongoing rise in Covid-19 infections does not bode well for the domestic smartphone market as analysts expect the disruptions caused could dampen consumer sentiment, which in turn could lead to subdued shipments during April-June.

According to IDC India, while the vaccine rollout at the start of 2021 instilled positive sentiment, the second wave of infections towards the end of March resulted in subdued consumer demand. Thus, the inventory cycle which had shrunk earlier in H2 2020 started to get longer since mid-Q1 2021.

IDC India research director (client devices & IPDS) Navkendar Singh said, “April-June quarter is expected to face growth challenges under the weight of the second wave of infections. However, the high shipments from first quarter should be able to suffice for the immediate demand.”

However, the impact is expected to be less pronounced compared to 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.

Singh, however said, “The recovery in 2021 might not be as smooth as expected earlier, with uncertainty around the lasting impact of the second wave and a possible third wave in next few months.”

IDC expects a rebound in consumer sentiment in the second half of 2021, resulting in a single-digit growth annually. However, the degree of growth will be restricted due to reduced discretionary spending, supply constraints, and anticipated price hikes in components in upcoming quarters, he said.

In the January-March 2021 quarter, the Indian smartphone market reported a healthy 18% year-on-year growth totalling 38 million units, but declined by 14% from a strong Q4 2020.

During Q1 2021, almost 7% of overall shipments were 5G, leading to a 3% year-on-year increase in average selling price to $176 (around Rs 12,000). The premium segment ($500+), grew 143% year on year, with 71% of those based on 5G. Apple, Samsung and OnePlus continued to dominate in that space. The iPhone 11 and 12 together accounted for 28% of shipments, followed by the debut of Galaxy S21 series and the OnePlus 9 series.

Feature phone shipments declined by 8% year on year, despite Reliance Jio launching its new 4G device bundled with telco offers. However, the 2G segment witnessed 3% growth driven by iTel and Lava, IDC India said.

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