With 5G<\/a> smartphone market share now touching 50%, distribution and retail channels are struggling to clear remaining stocks of 4G<\/a> handsets with more than nine weeks of inventory currently stuck in the channels, market trackers said.
Smartphone brands have started to permanently slash prices of 4G handsets nearing their end-of-life cycle in a bid to clear out the stocks ahead of the crucial festive season starting from August.
“The 4G inventory stuck is currently higher than the average market inventory, which at this point of time is around 9-10 weeks,” said Prachir Singh, senior research analyst, Counterpoint Research<\/a>.
This, while the demand for 5G smartphones<\/a> is steadily rising with market share touching 50% in April on the back of decreasing average selling prices (ASP).
As 5G smartphones now fall below the Rs 15,000 segment, the current 4G smartphones in the market are seeing few takers. “We are finding it difficult to sell old models with low RAM and storage. Some retailers have even stopped stocking 4G smartphones altogether,” said Manish Khatri, partner at Mahesh Telecom<\/a>.
“We have cut down on taking in more 4G smartphones from distributors since April as the demand has fallen drastically. We are only taking in stocks of those 4G models which have seen price cuts, that too in limited quantities,” a New-Delhi based retailer told ET.
With 5G<\/a> smartphone market share now touching 50%, distribution and retail channels are struggling to clear remaining stocks of 4G<\/a> handsets with more than nine weeks of inventory currently stuck in the channels, market trackers said.
Smartphone brands have started to permanently slash prices of 4G handsets nearing their end-of-life cycle in a bid to clear out the stocks ahead of the crucial festive season starting from August.
“The 4G inventory stuck is currently higher than the average market inventory, which at this point of time is around 9-10 weeks,” said Prachir Singh, senior research analyst, Counterpoint Research<\/a>.
This, while the demand for 5G smartphones<\/a> is steadily rising with market share touching 50% in April on the back of decreasing average selling prices (ASP).
As 5G smartphones now fall below the Rs 15,000 segment, the current 4G smartphones in the market are seeing few takers. “We are finding it difficult to sell old models with low RAM and storage. Some retailers have even stopped stocking 4G smartphones altogether,” said Manish Khatri, partner at Mahesh Telecom<\/a>.
“We have cut down on taking in more 4G smartphones from distributors since April as the demand has fallen drastically. We are only taking in stocks of those 4G models which have seen price cuts, that too in limited quantities,” a New-Delhi based retailer told ET.
Ajay Sharma, advisor to research firm TechArc<\/a>, said the only way to clear out the stocks of 4G smartphones now, is to slash prices and run promotional offers to attract customers. He added that there will continue to be demand for 4G smartphones — unlike what happened to 3G handsets when 4G smartphones started flooding the market in 2015 — due to the limited consumer use cases of 5G networks outside of fast speeds and less buffering.
This is already playing out in the market with brands such as Xiaomi<\/a> allegedly “extending support of around Rs 20 crore to its retailers to facilitate the sale of their unsold end-of-life models,” said a member of the All India Mobile Retailers Association.
Over a dozen 4G smartphones from the brand have seen price drops of Rs 2,000-3,000 to clear out the inventory.
“If you look at the recent launches, hardly any brands are now launching new 4G smartphones. Only those brands who had placed large orders in their supply chain are forced to launch 4G smartphones to clear out the inventory of components before they become unviable,” Sharma said.
Time is also running out for the brands to clear out old stocks of 4G handsets as the festive season is set to start from August, which is when they will be launching more new models. 5G networks too are expected to be rolled out in the major cities and towns by the end of the year, as per both Reliance Jio and Bharti Airtel.
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