While there were 40 new models launched in April and May, only nine new models were launched in India in June, signalling a sharp reduction in the number of new offerings. Brands are stuck with weeks of inventory in their warehouses after the online channels reduced intake of supplies, according to Counterpoint Research.
There was just one new model from market leader Xiaomi<\/a> in June, under its POCO<\/a> sub brand, as it battled government agencies in a FEMA case in the Karnataka High Court. Samsung<\/a>, which had the second highest market share in Q1, launched just one new model.
The slowdown in new launches comes as market trackers are reporting a sharp decline in shipments in May.
Smartphone shipments<\/a> declined 9.2% month-on-month in May even as the component shortage situation improved globally.
This is due to a slump in demand, especially in the budget segment primarily served by 4G smartphones. However, owing to shortages of 4G chips, brands have increasingly focused on the mid to high-end segment, pushing up the average sales prices.
A Crisil<\/a> report published Wednesday said the prices of 5G phones are unlikely to decline in the near term, and any relief is possible only in the festival quarter in 2022, when vendors are likely to clear stock.
\"If demand falls off a cliff, we have to take the route of offering steep discounts. There's no way out,\" said an industry executive who wished not to be named. The person also confirmed there is a softness in the online channels, which may impact the sale of brands dependent primarily on ecommerce brands for their sales.
Smartphone brands are already offering discounts on models they are unable to sell in the market. For instance, the Samsung Galaxy A23, which launched in India in March at Rs 19,499, is now retailing at Rs 18,499. The Samsung Galaxy A33 5G, which was initially listed at Rs 28,499, is now selling at Rs 25,499.
A Xiaomi spokesperson too said they will be participating in the upcoming festive season sales with discounts and offers, indicating that prices may fall in a bid to spur demand.
With festive sales for the online channels set to start from August, Q3 may look brighter for smartphone companies. Samsung is preparing to launch the Galaxy M13 and M13 5G in July, followed by the big launch of its foldable smartphones in August, according to the person cited above.
Market leader Xiaomi too is preparing to launch new models under the Redmi K series in July, while Realme also has a couple of launches planned. Oppo has announced the launch of the Reno 8 series, while a new brand, Nothing, is gearing to launch its first smartphone in India in July. Google is also expected to launch its budget Pixel phone this month.
The smartphone market also saw a change in the top five in May, with Samsung, Realme and Oppo losing market share, and Vivo and Xiaomi gaining a few spots. Xiaomi closed May with 22% share, Samsung and Vivo with 18% share each, and Realme and Oppo with 15% and 10% share respectively.
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