Smartphone industry set for smart growth in New Year; shipments likely to touch 190-200 min

New Delhi: Indian smartphone industry might have hit speed bumps on component supply crunch but the resilient sector is poised to see 190-200 million shipments in 2022 with more 5G devices vying for consumers’ attention.

When the pandemic forced people to stay indoors, smartphones became their window to the world, helping them stay connected with friends, Work From Home (WFH) and even learn new recipes. As people embraced hybrid work models, binged on web series and shot innumerable ‘Reels’ to stay entertained, the demand for smartphones went up significantly even as supply faced issues.

According to Counterpoint Research Analyst Shilpi Jain, the Indian smartphone market has been experiencing a steady growth curve over the last five years, growing continuously to reach 158 million units in 2019.

“The impact of COVID-19 saw the market experiencing a minor dip showcasing its resilience. The market is now set for an accelerated growth period realising the true potential of the Indian market in the coming years crossing the 200 million mark in 2022,” she said.

CyberMedia Research (CMR) Analyst – Industry Intelligence Group Anand Priya Singh estimated the smartphone shipments to hover around a similar level of 187-190 million in 2022 with a further uptick in 5G device shipments, growing 129 per cent year-on-year from 28 million in 2021 to around 64 million in 2022.

Singh said there has been an 11 per cent year-on-year growth in smartphone shipments from 150 million in 2020 to 167-168 million in 2021.

While 5G networks may not be available yet, industry watchers say 5G smartphones are in demand as consumers consider 5G among their top 3 priorities while purchasing smartphones.

Realme India CEO Madhav Sheth said conversations around 5G technology and devices have been buzzing since 2019 and smartphone manufacturers introduced 5G devices in early 2020.

“Given that 5G trials are scheduled for 2022, and spectrum auctions are likely to happen in H2 2022, we expect a higher demand for 5G devices in the upcoming year. Realme aims to be a 5G leader and a democratiser in India, and will therefore equip all smartphones above Rs 15,000 with 5G. We are also working towards bringing this technology to the sub-Rs 10,000 segment,” he added.

The global semiconductor shortage did have an impact on the Indian smartphone market during the second half of the year. During the festive season and third quarter, the consumer demand outstripped the supply.

“We believe that the shipments could have been 10-15 per cent higher during the third quarter in 2021. The semiconductor shortage will continue to affect the Indian smartphone market in 2022, however, we believe the situation will improve in the second half of the year,” Counterpoint’s Jain said.

Xiaomi India Chief Business Officer Raghu Reddy noted that over the last two years, the market has been witnessing a price hike of components such as chipsets, batteries and memory chips used by all smartphone manufacturers.

“This, in turn, has impacted the price of smartphones and has led to an inevitable price increase across SKUs (Stock Keeping Units)... While there continues to be a massive gap between demand and supply, we tried to bridge some of it by impressing on our Make in India Initiative,” he added.

Prices of electronic components went up by an estimated 20 per cent on account of disruption in the global supply chain. -(PTI)