COVID-19: Smartphone Production in India Could Fall By 40%

The pandemic has resulted in a country lockdown, which has shut down production of all mobile brands.

Major brands have shut down their plants, severely affecting their supply.

(Photo: Reuters)

Revising its estimates amid the novel coronavirus pandemic, a new report said on Thursday that smartphone production in India is likely to tumble by 38 to 40 percent in the first half (H1) of this year.

"Our current India smartphone market assessment points to a bleak picture. We anticipate a significant drop of around 20 percent YoY in smartphone shipments in Q1," Prabhu Ram, Head-Industry Intelligence Group, CMR, said in a statement.

The prospects for H2 2020, however, are brighter with shipments likely to rise 15 percent year-on-year, thus, raising the industry spirits, said the report.

Both supply and demand have been hit and while the OEMs could tide over the initial wave of coronavirus crisis in January and February with adequate component supplies, the closure of smartphone factories in India has dented recovery prospects for H1.

Samsung, Apple, Xiaomi, Vivo, Oppo, Realme and others have temporarily shut production in India amid the 21-day nationwide lockdown.

On the demand side, with the coronavirus scare, offline channels are massively impacted with sales down by 55-60 percent.

"If one were to go by China's experience, the online channels made-up for the deficit, incurred in offline channels. However, in the Indian context, with the initial 21-day lockdown in force, we are now looking at a rather uncertain future,” the report adds.

For smartphone brands, the coronavirus pandemic will cause them to reflect, and realign their market strategies. "That said, we believe online has the potential to pick-up in terms of sales during mid- to late- Q2 and beyond," said Amit Sharma, Manager-Research, CMR.

"In H2, the smartphone market will recover, and perform better in the run-up to festive season and beyond.”