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<\/span><\/figcaption><\/figure>NEW DELHI: Higher prices of smartphones and general inflationary pressures are hurting demand significantly for the devices<\/a> in India, the world's second largest market, where quarterly on-year declines in shipments have been persistent. The outlook too is grim with market trackers and retailers pointing to growing inflation<\/a> and a likely further rise in smartphone prices in the coming months amid a resurgence in covid cases in China complicating supply chain issues for handset manufacturers.

“Early indicators point to both tapered shipments and demand. The demand side is getting impacted due to inflationary pressure on consumer incomes and spending,” said
Navkender Singh<\/a>, research director at IDC India. “Also, there are signs of the replacement cycle going up, meaning consumers are keeping their current device a little longer (compared with 2019\/20) and delaying the purchase.”

Rising component costs also mean the brands are not finding the entry-level – which makes up almost 75% of the market by volumes - as profitable, choosing to move up the price ladder to the mid-premium segment with higher margins, said Singh.

\"Brands are finding themselves stuck between a rock and a hard place, facing lower demand in higher price segments, but unable to lower prices due to the supply constraints,\" Singh added.

This is leading to a lack of organic growth in customers.

First-time smartphone buyers are unable to enter the
smartphone market<\/a> due to higher costs of acquiring a smartphone spurring a slowdown in conversion of feature phone users to 4G\/5G smartphones.

“There's no reason for anyone to upgrade. So what the brands did was they held on to a particular price point, but because the cost of the components increased, consumers are not able to see any major upgrade at that particular price point,” said
Madhav Sheth<\/a>, vice president of fast growing smartphone brand Realme.

“We have also fallen into that trap, but we're trying to keep the pace up, thinking how we can bring differentiation in our products,” he added.

Handset brands Xiaomi, Vivo and Samsung did not respond to emails seeking comment.

A Croma store manager in New Delhi said walk-ins and queries on smartphones have gone down. Chandu Reddy, director of
Sangeetha Mobiles<\/a>, said there’s more demand for refurbished smartphones. “People are also availing financing options to buy higher priced models, but in general, the longevity has increased, which is why there’s a decline in shipments.”

India’s smartphone market declined 3% year-on-year in the first quarter of 2022, as per Strategy Analytics, and 1% according to Counterpoint Research.

Strategy Analytics said it expects a challenging full year ahead for smartphone vendors in the country.

“It is the third consecutive quarter of annual decline for the world’s second-largest market. Continuous declines have hardly been associated with the India market which have posted double-digit growth on a regular basis prior to the covid pandemic,” Strategy Analytics said.

It also predicted a hike in device prices in the upcoming quarters because of growing inflation amid the war in Europe in progress.

A lot of pent-up demand from the covid curbs in 2021 and where consumers just wanted to get out and spend, drove up shipment volumes. “This factor is largely missing in the current year,” said
Rajeev Nair<\/a> of Strategy Analytics.

But he expects the second half to be better than the first, as smartphone vendors and retailers go all out with discounts and financial schemes to boost sales in the all-important festive season in the October-November period that typically accounts for a third of annual sales. Global semiconductor shortage is also expected to ease in the second half of 2022, according to a Component Tracker report from Counterpoint Research.

Despite a likely upturn, the India market is likely to see only a 4% on-year growth in shipments in 2022 to 170 million, compared with a 11% growth in 2021, Nair predicted.
\"India<\/a><\/figure>

India smartphone market declines 1% to 38 mln units in Q1: Counterpoint<\/a><\/h2>

Xiaomi was the top smartphone vendor in Q1 2022 (by shipments), though it declined by 13% year-on-year. Samsung recaptured the second spot with a 1% year-on-year decline while Realme was the only brand among the top five players to record year-on-year growth (40%), Counterpoint said.<\/p><\/div>

\"\"
<\/span><\/figcaption><\/figure>NEW DELHI: Higher prices of smartphones and general inflationary pressures are hurting demand significantly for the devices<\/a> in India, the world's second largest market, where quarterly on-year declines in shipments have been persistent. The outlook too is grim with market trackers and retailers pointing to growing inflation<\/a> and a likely further rise in smartphone prices in the coming months amid a resurgence in covid cases in China complicating supply chain issues for handset manufacturers.

“Early indicators point to both tapered shipments and demand. The demand side is getting impacted due to inflationary pressure on consumer incomes and spending,” said
Navkender Singh<\/a>, research director at IDC India. “Also, there are signs of the replacement cycle going up, meaning consumers are keeping their current device a little longer (compared with 2019\/20) and delaying the purchase.”

Rising component costs also mean the brands are not finding the entry-level – which makes up almost 75% of the market by volumes - as profitable, choosing to move up the price ladder to the mid-premium segment with higher margins, said Singh.

\"Brands are finding themselves stuck between a rock and a hard place, facing lower demand in higher price segments, but unable to lower prices due to the supply constraints,\" Singh added.

This is leading to a lack of organic growth in customers.

First-time smartphone buyers are unable to enter the
smartphone market<\/a> due to higher costs of acquiring a smartphone spurring a slowdown in conversion of feature phone users to 4G\/5G smartphones.

“There's no reason for anyone to upgrade. So what the brands did was they held on to a particular price point, but because the cost of the components increased, consumers are not able to see any major upgrade at that particular price point,” said
Madhav Sheth<\/a>, vice president of fast growing smartphone brand Realme.

“We have also fallen into that trap, but we're trying to keep the pace up, thinking how we can bring differentiation in our products,” he added.

Handset brands Xiaomi, Vivo and Samsung did not respond to emails seeking comment.

A Croma store manager in New Delhi said walk-ins and queries on smartphones have gone down. Chandu Reddy, director of
Sangeetha Mobiles<\/a>, said there’s more demand for refurbished smartphones. “People are also availing financing options to buy higher priced models, but in general, the longevity has increased, which is why there’s a decline in shipments.”

India’s smartphone market declined 3% year-on-year in the first quarter of 2022, as per Strategy Analytics, and 1% according to Counterpoint Research.

Strategy Analytics said it expects a challenging full year ahead for smartphone vendors in the country.

“It is the third consecutive quarter of annual decline for the world’s second-largest market. Continuous declines have hardly been associated with the India market which have posted double-digit growth on a regular basis prior to the covid pandemic,” Strategy Analytics said.

It also predicted a hike in device prices in the upcoming quarters because of growing inflation amid the war in Europe in progress.

A lot of pent-up demand from the covid curbs in 2021 and where consumers just wanted to get out and spend, drove up shipment volumes. “This factor is largely missing in the current year,” said
Rajeev Nair<\/a> of Strategy Analytics.

But he expects the second half to be better than the first, as smartphone vendors and retailers go all out with discounts and financial schemes to boost sales in the all-important festive season in the October-November period that typically accounts for a third of annual sales. Global semiconductor shortage is also expected to ease in the second half of 2022, according to a Component Tracker report from Counterpoint Research.

Despite a likely upturn, the India market is likely to see only a 4% on-year growth in shipments in 2022 to 170 million, compared with a 11% growth in 2021, Nair predicted.
\"India<\/a><\/figure>

India smartphone market declines 1% to 38 mln units in Q1: Counterpoint<\/a><\/h2>

Xiaomi was the top smartphone vendor in Q1 2022 (by shipments), though it declined by 13% year-on-year. Samsung recaptured the second spot with a 1% year-on-year decline while Realme was the only brand among the top five players to record year-on-year growth (40%), Counterpoint said.<\/p><\/div>