Sales of smartphones crossed 12 million last month, making it the best January in five years and indicating that pent-up demand has not faded in the aftermath of the Covid-19 pandemic.
Total smartphone shipments for the first quarter, considered the leanest period in terms of sales, are forecast to be 33-36 million, which would be the highest for Q1 in years, top research firms told ET.
“The growth momentum in January was driven by new and exciting 5G launches along with attractive discounts and offers on Republic Day sales,” said Tarun Pathak, research director at Counterpoint Technology Market Research. “We are expecting a healthy first quarter with shipments in the range of 33-36 million only if brands are able to manage the supply constraints, which are getting even worse in 2021.”
Pathak said smartphone sales could increase 10% on-year in the January-March quarter, but a more realistic comparison would be with Q1 of 2019 because global supply chains had started seeing the impact of Covid-19 in March 2020.
Top brands Xiaomi, Samsung, Oppo, Realme and Lava started 2021 with a higher number of smartphone launches. Xiaomi, India’s No. 1 smartphone seller by volumes, alone sold 1.5 million units during the five-day Republic Day sale, a growth of 42% from 1.08 million devices shipped a year earlier.Experts predict smartphone sales will return to double-digit growth and increase 12%-21% in 2021, up from 150 million in 2020.
However, analysts are wary of a severe component shortage that could hamper steady supplies for handset companies.
“Since the start of Covid-19, brands have been struggling to overcome challenges but in the face of rising fuel costs and component prices, they may be forced to delay launches, especially in the budget segment,” said an analyst at a research firm.