April-June Quarter to Face Growth Challenges Over India Phone Market: IDC

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After posting a healthy 18 percent growth (year-on-year) in the first quarter this year, the April-June quarter is expected to face growth challenges amid the state-level lockdowns and subdued consumer demand, the International Data Corporation (IDC) said on Tuesday.

While the vaccine roll-out program at the beginning of the year instilled positive sentiments, the onset of the second wave of Covid-19 infections towards the end of the quarter resulted in subdued consumer demand.

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Thus, the inventory cycle, which had shrunk earlier in 2H20, started to get longer since mid-Q1, 2021, according to the IDC’s ‘Quarterly Mobile Phone Tracker.

“The April-June quarter is expected to face growth challenges under the weight of the second wave of infections. However, the high shipments from the first quarter should be able to suffice for the immediate demand,” said Navkendar Singh, Research Director, Client Devices & IPDS, IDC India.

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“The recovery in 2021 might not be as smooth as expected earlier, with uncertainty around the lasting impact of the second wave and a possible third wave in next few months,” Singh said in a statement.

IDC expects a rebound in consumer sentiments in the second half of 2021, resulting in a single-digit growth annually.

“However, the degree of growth will be restricted due to reduced discretionary spending, supply constraints, and anticipated price hikes in components in upcoming quarters,” Singh added.

The Indian smartphone market reached 38 million units in Q1 2021 but declined 14 per cent from a strong fourth quarter of 2020.

Online channels continued their growth momentum ahead of the overall market at 25 per cent (YoY), despite a slip in their share to 46 per cent quarter-over-quarter (QoQ), while offline channels grew at 13 per cent YoY.

MediaTek-based smartphone shipments continued to lead for three consecutive quarters with a share of 52 percent, widening the gap with Qualcomm, which had a 35 percent share.

“IDC expects a boost in 5G shipments with more affordable options, stickiness through financing/trade-in programmes, and steeper discounts/cashback offers,” said Upasana Joshi, Associate Research Manager, Client Devices IDC India.

Xiaomi continued to lead the Indian smartphone market with a 27.2 per cent share, despite only posting 3 per cent YoY growth.

Samsung retained its second spot with 19 per cent share, growing fastest among the top 5 vendors with 43 per cent YoY growth in Q1.

Vivo, with a 17.3 per cent share was at the third position, with shipments declining by 3 per cent YoY. OPPO and realme rounded off the top 5 list.

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