Entry level and refurbished smartphones to see the growth in India
By MYBRANDBOOK
Because of the ongoing coronavirus pandemic and the nationwide lockdown, every business including smartphone sales have taken a hit and are expected to continue even further through 2020. Many OEMs to come out with affordable phones.
Many consumers are feeling that there will be a control over the spending and is expected to cut down, hence many will go for the affordable and refurbished smartphones for immediate needs, which could increase the share of entry-level under Rs 5,000 and basic smartphones between Rs 5,000 and Rs 10,000 in India. The reason being consumers cut back on discretionary spending and buy phones only for immediate needs.
Currently, smartphone sales have stopped online and are reportedly zero in the offline market as well, owing to the nationwide lockdown. Both retailers and analysts do not expect smartphone sales to pick up until later this year.
As per the counterpoint research, the downward trend in both categories is likely to stabilize as both price bands will continue to hold their current market shares, experts say. This might also drag down average selling price (ASP) for smartphones by 10%-15% from $180 currently, according to estimate by Counterpoint Research.
“There will be some diffusion in downward direction across price bands,” said Neil Shah, research director at Counterpoint. “The trend will be trickling down, especially from Rs 10,000 to Rs 8,000 and gradually to Rs 5,000 as need for number of phones per family goes up while budgets get trimmed as income-cuts or job-cuts play out.”
Apalak Ghosh, industry manager at US-based market research firm Frost & Sullivan says, whatever shallow demand for mobile handsets we see in second quarter this year, will definitely hit the lower spectrum of price bands, while we may see some rebound towards November-December.
On the contrary, International Data Corporation (IDC) has a contrarian view, predicting that ASPs may actually rise, albeit minutely, as phone prices increase due to GST hike even though sale volumes have hit rock bottom. The government had increased GST on smartphones from 12% to 18% from April 1 which translated into price hike by major brands including Samsung, Realme and Xiaomi.
“Smartphone sale volumes are primarily driven by replacement impulse from buyers who are excited by fresh launches,” said Navkender Singh, Research Director at IDC, India. “This year will not see any such excitement. In fact, a user in immediate need of a phone will either go for a refurbished model or repair the existing one.”
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