In January, smartphone sales were 19% higher than in December 2022, supported by online purchases around Republic Day, but in February they dropped by 12% (month-on-month), said Shilpi Jain, senior research analyst at Hong Kong-based Counterpoint Research. The downtrend is expected to show in March as well, she said.
Overall, the quarter may have seen a decline of 10-15% year-on-year, according to Counterpoint Research’s initial estimates. The data for March is yet to be finalised.
“We saw a year-on-year decline in shipments in both January and February. In January, there was a surge in sales around Republic Day, but the market was not as active as last year,” said Jain. “February was slower because after the sale, footfalls have declined, from what we have heard from retailers and other channel partners.”
The impact of low consumer demand is also playing out at the distributor level.
“Channel partners are vulnerable and are not able to accept large quantities of shipments,” said Sanyam Chaurasia, analyst at Singapore-based Canalys, citing it as a reason for slower inventory movement in Q1. “Because their turnover rate has been slow. They are already sitting on inventories from last year, where they have to bear extra margin cuts. There is low demand and distributors are reluctant to accept huge quantities.”
However, sales momentum in the premium smartphone segment sustained due to newer launches and discounts, but remained low for the overall market.