Supply constraints and global chip shortages have put a stop to the Indian smartphone market's unprecedented post-covid surge. According to the International Data Corporation’s (IDC) Worldwide Quarterly Mobile Phone Tracker, India's smartphone market registered a year-over-year (YoY) decline of 12% in 3Q21 (Jul-Sep), shipping 48 million units after four consecutive quarters of growth. The report also said that the market should register low single-digit growth as it exits 2021.
The report claims that that much of this can be attributed to component shortages as well as an unusually high 3Q20 comparison base. Whereas this year’s post-lockdown demand was addressed by July, the same period during 2020 witness pent-up demand after the covid-driven lockdowns. Compared to 3Q19, 3Q21 grew by 3% as channels stocked up for the Diwali quarter amid the supply shortages, the report noted.
“The first nine months of the year (Jan-Sep’21) already shipped 120 million units, with H121 clocking 42% YoY growth. Due to supply challenges, 4Q21 is expected to see a decline, resulting in annual shipments below 160 million in 2021," said Navkendar Singh, Research Director, Client Devices at IDC. "The first half of 2022 will remain challenging, with some easing out expected in the latter half of 2022. Vendors/channels will keep an eye on the over-stocking situation in case demand stays limited due to the price hikes by the suppliers and vendors,” he added.
Meanwhile, IDC's report said that online channels clocked a record high 52% share, although with a 5% YoY shipment volume decline. eTailer sales festivals (The Big Billion Days on Flipkart and Amazon Great India festival) started in early October, even before the Navratri festival this year, continuing until Diwali. Offline channels registered an 18% YoY shipment decline. IDC expects online shipments to surpass offline shipments in 2021, as per IDC.
Interestingly, India was the third-largest 5G smartphone market globally with 7% of worldwide 5G shipments, shipping 10 million units at an ASP of US$401 in 3Q21. From Jan-Sep'21, 17 million 5G smartphones were shipped to India and is expected to be under 30 million for 2021. The OnePlus Nord CE, iPhone 12, and Galaxy A22 were the most popular 5G models in 3Q21, as per IDC.