India's mobile phone market to drop 10% year-on-year in the second half of 2021

On June 3, IDC's Global Quarterly Mobile Phone Tracker showed that smartphone shipments are expected to reach 1.38 billion units in 2021, a 7.7% increase from 2020. This trend is expected to continue until 2022, with a year-on-year growth of 3.8%, and total shipments of 1.43 billion units.

Many countries around the world have already deployed 5G networks and are continuing to migrate to 5G devices, while emerging markets have shown strong demand for mid- and low-end 4G phones after the impact of the epidemic has slowed. Looking ahead, IDC expects low single-digit growth to continue until 2025, with a five-year compound annual growth rate (CAGR) of 3.7%. The global semiconductor shortage remains a concern for many industries, and the smartphone market is no exception. However, the negative impact is still less than other consumer technology markets such as automobiles and PCs.

Ryan Reith, vice president of IDC's Global Mobile Device Tracking Program, pointed out: "Smartphones are facing competition for consumer spending from adjacent markets such as PCs, tablets, TVs, and smart home devices, but this has not slowed the pace of market recovery. After the smartphone market resumed growth in the fourth quarter of last year, we saw that the output of leading manufacturers continued unabated. The supply side continues to vigorously promote 5G, and the average unit price continues to decline. IDC predicts that the average selling price of 5G Android devices will fall 12% year-on-year to US$456 in 2021, and will fall below US$400 in 2022. Apple will continue to feel price pressure."

Wang Xi, research manager of IDC China, said: "With the recent slowdown in terminal demand in the Chinese market and the recurrence of the epidemic in key overseas markets, various voices of 'order cuts' have been heard frequently in the supply chain. However, from a positive perspective, due to the higher demand for component orders in the early stage of the overall industry chain, the current 'order cuts' have not yet affected the normal user demand in 2021. However, the resistance currently encountered by the world's top two markets, China and India, cannot be ignored. Therefore, while striving to ensure the completion of the full-year goals, manufacturers should pay more attention to the continuity of terminal demand in key regional markets, pay attention to channel order and store inventory turnover and operational efficiency, so as to ensure healthier revenue in 2021."

Looking ahead to the Chinese and Indian markets in 2021, IDC pointed out that for the Chinese market, although the domestic mobile phone market had a "good start" in the first quarter, especially in January and February, thanks to the "staying at home for the New Year" and related policies to stimulate consumption, the overall domestic demand for replacement phones has not increased significantly, and the replacement cycle has not shortened. After the demand was prepaid, the overall market began to show a downward trend in March. At the same time, as the release and sales rhythm of most Android manufacturers' blockbuster products in 2021 are concentrated in the first quarter, the stimulus elements for consumers from the product side will also be reduced in the second quarter. IDC believes that although the market performance in the first quarter exceeded expectations, the market capacity in the second and second half of the year will be reduced, and the annual shipments will maintain a slight year-on-year growth of about 6%.

In the Indian market, the recurrence of the epidemic will have a huge impact on the market demand in the second quarter and throughout the year. At present, major city-states in India are still under lockdown, and there is no sign that supply chain problems will be alleviated. In terms of production, although the government has not closed any business, it will be affected because factories can only arrange one shift or a smaller number of employees. However, manufacturers tend to prepare before the expected market reopening time - June or later - to avoid supply restrictions at that time. Therefore, they try to run at full capacity during this period and produce as much as possible.

At the sales level, online channels for smartphone products have not been completely closed, and shipments can still be made in a few city-states such as Andhra Pradesh, Telangana, and Gujarat. In addition, some merchants in offline channels also used social media to promote their products, which generated certain sales, similar to last year's practice, but these sales were insignificant compared to normal sales. Therefore, IDC expects the Indian smartphone market to suffer a year-on-year decline of more than 10% in the second half of 2021. For the whole year, the market capacity is about 155 million units, and the year-on-year growth rate will slow down from 9.9% in the previous version to 3.6%.