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Impact of Supply chain on Smartphone shipments

The ongoing October-December quarter is expected to see a decline in smartphone sales in the country due to the ongoing supply chain related challenges, resulting in annual shipments below 160 million in 2021, as the report from IDC and the first half of 2022 will remain challenging, with some easing out expected in the latter half of 2022. Vendors/channels will keep an eye on the over-stocking situation in case demand stays limited due to the price hikes by the suppliers and vendors. IDC reveals that, India’s smartphone market registered a year-over-year (YoY) decline of 12% in 3Q21 (Jul-Sep), shipping 48 million units after four consecutive quarters of growth. Much of this can be attributed to component shortages as well as an unusually high 3Q20 comparison base whereas this year’s post-lockdown demand was addressed by July.

During the July-September quarter, the online channels clocked a record high 52% share, although with a 5% YoY shipment volume decline. At the same time, the eTailer sales festivals such as the Big Billion Days on Flipkart and Amazon Great India festival started in early October, even before the Navratri festival this year, continuing until Diwali. Whereas, the offline channels registered an 18% YoY shipment decline. IDC expects online shipments to surpass offline shipments in 2021. The report further says that India was the third-largest 5G smartphone market globally, with 7% of worldwide 5G shipments shipping 10 million units at an ASP of US$401 in 3Q21. IDC believes that a growing dependency on smartphones is triggered by remote work and learning, as well as a subsequent requirement for better quality hardware is pushing consumers to spend more. With continued chip shortages and logistics costs, brands are also compelled to expand upwards in terms of price points across channels,” said the experts of IDC. A report from Counterpo.