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Reduced shipments can be viewed in two ways. They could be attributed to either a slowing of economic activity or an excess of demand overstock. When Counterpoint recently provided data on the performance of the Indian smartphone industry, a number of analysts appeared to have taken the latter path. This line of thought appeared to be shared by the research agency as well. The title of their own interpretation of the findings was “India Smartphone Market Records Highest Ever Shipments, Revenue in 2021.”
The reason for this upbeat view of the Indian smartphone market is clear: according to statistics, smartphone shipments in 2021 reached 169 million units, the largest level ever in a single year, representing an 11 percent year-over-year increase.in comparison to 2020 The fact that this achievement was achieved despite a slew of obstacles, including a devastating second Covid-19 wave and the ensuing lockdowns, as well as supply concerns caused by a global component shortage, which resulted in a rise in smartphone pricing.
Two-Quarters of Negative Growth in a Row
All of this sounds fantastic. As long as you don’t pay too much attention to the latter two-quarters of this record-breaking performance, referred to as Q3 and Q4 of 2021. From July 1 to December 31, this is the time frame. In India, brands have traditionally done well during this time, with large discounts on online sales festivals in August and the festive season that follows, which observes a surge in sales. Extremely high investment. In other words, it’s the time of year when people are most likely to spend money.
According to Counterpoint Research, smartphone sales in India fell 2% in Q3 2021 and 8% in Q4 2021. Demand is outstripping supply in both cases, according to the research firm, and supply is limited due to component shortages.
In 2021, based on record-breaking Q1 and Q2 results
The Indian market’s record-breaking success in 2021 is due to exceptional first and second quarter shipments, not outstanding end-of-year shipments. According to Counterpoint Research, the market rose by 23% in Q1 2021, reaching 38 million units, which is the largest figure ever for the first quarter of a year. In terms of year-on-year growth, the second quarter was more remarkable, expanding by 82 percent, although this was largely due to the fact that most of the economy was shut down for a long period of time in Q2 2020.
When comparing Q2 2021 to Q1 2021, there was a modest drop from 38 million to 33 million, but it was still a significant drop. Even after the country had been destroyed by the second wave of Corona, it was still better than many had imagined.
Despite the Holiday Season, I’m Dipping
Shipments fell just as people were expecting a strong third quarter. Shipments in the third quarter of 2021 totaled 52 million units, down 2% from the third quarter of 2020. This was especially shocking given that the Indian smartphone market had reached its highest quarterly high ever in Q3 2020, with 53 million units shipped, the most ever in a single quarter in India. This rise was partly due to pent-up demand owing to the epidemic, and there was a feeling that it will happen again in Q3 2021. Regrettably, it did not, and the market retreated slightly. Many projected that Q4 2021 would be much better, as businesses would be stocking up for the festive season, despite component supply concerns that were becoming obvious — Counterpoint stated that “India Smartphone Shipments Cross 52 Million Units in Q3 2021 as Brands Prepare for Festive Season.” Given that smartphone brands often perform well in the latter two quarters of the year, the agency’s estimate was reasonable.
Despite the generally good headlines for 2021, the last quarter of the year did not prove to be particularly fruitful for smartphone manufacturers. Despite a number of high-profile launches and discounts, the sector saw an 8% drop. Even on the occasion of Diwali, one of India’s most famous festivals that generally results in high spending fell on November 4, the figures did not match those of the previous year and were down from the previous quarter as well. Supply difficulties, according to Counterpoint, are extremely likely to be at fault. But that doesn’t change the fact that, despite the fact that many people are celebrating a record year for the Indian smartphone market, not everything is perfect.
In 2022, the Challenge
January 2022 has given us signs as to how difficult the going maybe in the months ahead. OnePlus, one of the most popular premium brands in India, debuted the OnePlus 9RT gadget there about three months after it was released in China. In addition, Xiaomi surprised the market by releasing phones under the more expensive Xiaomi brand during the month, but not a single item from its bestselling Redmi lineup. Samsung, too, issued only one handset, the Galaxy S21 FE, which is a premium model. Prices have risen for the first time in a long time as a result of the component shortage, and Indian consumers are seeing smartphone prices rise for the first time in a long time.
The reason for this, according to our sources, is a shortage of components, particularly processors. However, there is a legitimate concern that the pandemic’s endurance has caused negativity and resulted in lower expenditures, which has resulted in stock markets dropping towards the end of January (they do seem to have rebounded a little following the Union Budget). According to some sources, businesses may focus more on somewhat higher-priced devices this year in order to make up for lost revenue due to lower sales. Of course, this is just conjecture.
For all you know, the first quarter of this year could end up being another record-breaker, just like the previous one. However, there is still more to be done. Although 2021 was a record year, we must not overlook the fact that it concluded on a sour note. Although India’s smartphone market is not experiencing a decline, it could use a boost in growth. Nobody knows where this will come from.
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