Smartphones Should Be Allowed to Sell As ‘Essential Goods’: Expert

Imagine if your phone broke or stopped working during this time. Pray that nothing of that sorts happens with you because you don’t have the option of buying a new one nor getting it repaired. Not at the moment.

The Ministry of Home Affairs has said that it will not allow the sale and supply of smartphones amid the lockdown which is scheduled to end on the 3rd of May. To add to this, even service centres and repair shops have been asked to stay shut.

This has not only stalled new phone launches by Xiaomi and Realme but has also stopped smartphone manufacturers from selling their current stock.

So, why the extension?

That’s a no-brainer. COVID-19. The government believes that with products, there will also be people in transit moving from one place to another delivering goods, and that increases the chance of spreading infection.

E-commerce platforms have been advocating precautionary measures like masks and gloves for the delivery personnel but even that hasn’t been convincing enough to get them a green light.

We spoke to Chinese smartphone maker Realme on what it thought about this extension.

“ From manufacturing point of view I think we have supply chain disruption already happening. I think it will take at least if not less but more than four weeks to stabilise this particular situation. As a manufacturer we have lost almost one quarter from 2020. I believe that all smartphone manufacturers would be strategising right now on the price points of the particular product and how are we going to sustain in the longer period of time.

Madhav Seth, Vice President Realme/CEO Realme India

So, should mobile phones be put in the “essential goods” category?

“Answer to this question should be a straightforward ‘Yes’ and there are a couple of reasons behind that.  We are more or less in a virtual world now. Dependence on our smartphones has gone up significantly. We are using this as a primary tool for communication, content consumption, playing games, and our reliability on it to connect with the outside world has increased.”

Tarun Pathak, Associate Director, Counterpoint Research

There are currently more than 480 million active smartphones in India and people using them are spending 5-8 hours a day on a smartphone during this lockdown. If this doesn’t quantify the need to categorise it as an ‘essential good’ I don’t know what else does.

Businesses have to resume if we’re to revive the smartphone industry that has seen a 50% drop in the first quarter of 2020.

Currently, Xiaomi is taking pre-orders for its smartphones, but deliveries cannot happen.

But what is the sentiment among Indian smartphone buyers? Are people even considering investing heavily in smartphones when clearly more focus is on conservative spending?

“The good thing about the smartphone industry is that phone demand is resilient, and it doesn’t get killed. It is always postponed. People are likely to postpone their purchase to Q3 or Q4 or even to 2021. The spending power of users might take a hit in Q3 or Q4 but the sales will still happen.”

Tarun Pathak, Associate Director, Counterpoint Research

The India Cellular and Electronics Association which is the apex body in India for the mobile devices industry has requested the government to allow service, maintenance, and the sale of mobile phones and other electronics and at the same time offering its support for the lockdown.

It also claims that more than 2.5 crore mobile customers are estimated to be with non-functional devices due to the non-availability of components in the supply chain and the restriction on sales of new handsets.

Currently, there is immense pressure on the government to give permissions for services to resume both in the online and offline sectors. The delay in opening factories and resuming deliveries is sure to affect the smartphone industry in the longer run.

At the moment the lockdown is scheduled to end on 3 May. Since the safety of people is paramount, we cannot be sure if manufacturers will be allowed to sell phones even after this lockdown ends.