Smartphone market may remain under pressure due to global factors in 2023
The Indian smartphone market, which battled global factors such as the inflationary macro environment as well as component shortages due to supply chain issues and the Russia-Ukraine war to register a 5 per cent fall in 2022, is set to remain under pressure next year, showing modest growth.
India currently has more than 600 million smartphone users, a number which is expected to grow over time as more feature phone users migrate to smartphones.
The replacement demand from these users will drive the market in 2023 and beyond, according to Counterpoint Research.
“5G accounted for almost one-third of smartphones in India in 2022. Next year, close of 50 per cent of all smartphones will be 5G,” research analyst Ankit Malhotra told IANS. The 5G networks have gone live in multiple cities, thanks to Reliance Jio and Bharti Airtel.
Even though 5G smartphones have been making news in the market, they will account for just one-third of the market in 2023.
5G has been high on Indian consumers’ wish lists and with 5G networks now being available, many consumers will replace their 4G smartphones in 2023.
The government purchase of smartphones will also push sales, Rajasthan has already rolled out a tender for the acquisition and distribution of smartphones among women in 2023.
“We also expect the inflationary macro environment to get better next year. Therefore, consumers who postponed buying a new phone in 2022 will be able to buy a new one in 2023,” according to Counterpoint Research.
Despite the dip in 2022, India’s smartphone market has been resilient and performed better than many other regions.
A large installed base, feature phone-to-smartphone migration, local smartphone production, development of supply chain and the emergence of newer use cases will continue to grow the market in the longer term, according to industry experts.
The Indian market has seen a steady rise in the last five years barring the Covid-hit 2020 to grow 1.5 times from 2016 to 2021. The market is projected to grow 10 per cent in 2023 to reach 175 million units.
The market failed to meet expectations in 2022 and started the year with component shortages.
But even as the situation resolved on the supply side by the first half of 2022, the consumer demand did not improve as expected.
The weak demand was especially felt in the entry and mid-level price bands owing to the increase in retail prices due to the rise in component prices and inflationary macro environment.
Prabhu Ram, Head-Industry Intelligence Group, CMR, told IANS that the smartphone market will be resilient in India in the year ahead, driven by premium as well as value for money smartphone offerings, predominantly in the 5G market.
“CMR anticipates close to 180 million smartphones to be shipped in the year ahead,” he said.
In the immediate short-term, if component production levels in China get impacted owing to the ongoing Covid surge, coupled with the upcoming Chinese New Year holiday season, it could pose challenges for the smartphone market in the first half of 2023, Ram anticipated.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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