Smartphone brands could suffer 5 mn shipment loss due to lockdown: Report

The smartphone industry in India is staring at major losses in the coming days due to the lockdown that has been announced in various states across the country.

As per an Economic Times report, brands are looking at losses of 5 million shipments due to the lockdown in the second quarter through June which was supposed to be a crucial sale period in states like Maharashtra, Chattisgarh and Madhya Pradesh.

Smartphone shipments hit hard

While sales will be hit a bit this quarter, companies are not stalling the production of devices as they believe that demand will bounce back after the restriction have been lifted. There was a similar situation back in 2020 which smartphone brands managed to handle efficiently.

Some of the industry players also said that the transportation of components and finished good will be challenging due to the night curfew that has been imposed in certain states.

The Maharashtra government has taken stern steps to curb the spread of the virus. It even denied e-commerce platforms to deliver smartphones in the state, which roughly accounts for 10 percent of the total sales in the country.  Seeing that online players have an upper hand advantage, the offline retailers have written to the Madhya Pradesh CM Shivraj Singh Chouhan seeking similar restrictions for online players. Though offline retailers would be appeased, this would be a big jolt for the brands who would lose out on potential buyers.

Speaking to The Economic Times, Tarun Pathak, Director at Counterpoint Research said that the second quarter will witness a 15 percent fall over industry estimates which was earlier at 37-39 million units shipped.

“It is roughly a washout of 5 million shipments. We have taken Maharashtra lockdown and other factors into consideration. However, we are not changing annual predictions since demand could be resilient,” he added.

Brands concerned

Smartphone brands have come forward with their own concerns regarding the restrictions. Xiaomi, the country’s top smartphone brand, says that the impact due to the lockdown in certain parts of the country will be short-lived.

Lava Mobiles is already seeing an impact on its sales. “If the current situation persists, then we might face more challenges in the coming days… the pandemic has disrupted the global supply chain. We are facing component shortage as well as witnessing an escalation in their prices,” Sanjeev Agarwal, CMO at Lava International said.

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