Supply chain issues hit Indian smartphone industry, shipments slide 1% in Q1 2022

Post By : Karvi Rana
Post Date : April 29, 2022
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Supply chain issues have now come to bite the smartphone industry of India, which began to see the issues spur during the end of the 2021-2022 fiscal year, last quarter.

Being dragged ever since, in the final quarter of the FY 2021-22, the smartphone shipments of the country fell by 1% year-on-year. All sellers in the country sold a total of 38 million units of them in the final quarter of the fiscal year that just ended according to the latest research from Counterpoint’s Market Monitor service.

The dip witnessed in the numbers is much lower than expected as the industry over the past few years have shown splendid growth on the back of budget phones which have penetrated through all walks of life.

Indian smartphone market like other industries, plagued by the coronavirus pandemic and the lockdowns enforced by the government, alongside the issues of semiconductor and mobile chip shortages since the second half of 2020, has shown resilience and managed to grow, even more, than other developing or developed nations. The shift of educational institutions towards online modes of education and demand-supply gaps shrinking in 2021, signaling an approaching end to supply tightness across the broader ecosystem helped a great deal in maintaining the industry growth. According to IDC, India’s smartphone market grew by 7% in 2021, despite continued pandemic-related challenges.

The trend was expected to continue, however, the tiny 1% growth, especially at the start of the new fiscal year has taken government, experts, and people by surprise

The New Covid wave has reversed the 2021 revival. Supply issues, high inventory levels, and softening of consumer demand due to high inflation were the major reasons for the decline in the first quarter.

India’s overall mobile handset market declined 16% YoY in Q1 2022. The feature phone market registered a decline of 39% YoY.

Thus, there is an urgency for the industry to collaborate with the Indian government and address the problem as quickly as possible.

Dominated by the budget phones considering the vast size of the middle-class population in India, the smartphone industry had Xiaomi, Samsung, Realme, Vivo, and Oppo as the top-selling phones in the country last year. All of their biggest selling phones cost under Rs. 20,000. Apple on the other prices their phones well over Rs. 60,000 which is way over budget for a large population of the nation.

Xiaomi emerged as a winner in India’s smartphone market in Q1 2022, despite taking a decline of 13% YoY. Samsung recaptured the second spot, with a 1% YoY decline. Realme stood at the third spot and was the only brand among the top five players to witness year-on-year growth (40%) in Q1 2022. Adopting UNISOC (a Chinese fabless semiconductor company) chipsets for its mass-market models worked in its favor as it did not experience slower shipments after the festive season. OnePlus grew 347% YoY while Apple grew 5%.

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