Smartphone production may drop 40% in India in the first half of 2020: report – Latest news

Reviewing its estimates amid the new coronavirus pandemic, a new report said that smartphone production in India is likely to drop by 38-40 percent in the first half (H1) of this year.

However, the outlook for H2 2020 is more encouraging as shipments are likely to increase 15% year-on-year, raising the spirit of the industry, according to the CyberMedia Research (CMR) report.

"Our current assessment of the Indian smartphone market points to a bleak picture, with some promise in H2. We anticipate a significant drop of about 20 percent, year-over-year, in smartphone shipments in the first quarter." Prabhu Ram, Director of Industry Intelligence, CMR, said a statement.

"There will be a full impact in the second quarter of 2020, with a sharp decline of about 28 percent, year-over-year," added Ram.

Both supply and demand have been affected, and while OEMs could weather the initial wave of coronavirus crises in January and February with an adequate supply of components, the shutdown of smartphone factories in India has hurt prospects. Recovery for H1.

Samsung, Apple, Xiaomi, Vivo, Oppo, Realme and others have temporarily closed production in India amid the 21-day national blockade.

On the demand side, with the coronavirus scare, offline channels are massively affected and sales decrease by 55-60%.

"If China experience were taken into account, online channels made up for the deficit, incurred by offline channels. However, in the Indian context, with the initial 21-day blockade in place, we are now seeing a fairly uncertain future.

"That said, we believe that online has the potential to bounce back in terms of sales during the middle and end of the second quarter and beyond," said Amit Sharma, Research Manager, CMR.

For smartphone brands, the coronavirus pandemic will make them reflect and realign their market strategies.

"In H2, the smartphone market will rebound and perform better in the run-up to the holiday season and beyond. Cumulative consumer demand will be high, and with the right message from smartphone brands, consumers will seek to improve its value for money and premium smartphones, "said Ram.