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Shipments likely to decline in Q4 due to supply challenges, says IDC

Bengaluru, NFAPost: India’s smartphone market registered a year-over-year decline of 12% in 3Q21 (July-Sep), shipping 48 million units after four consecutive quarters of growth, according to research and forecast firm International Data Corporation’s (IDC) worldwide quarterly mobile phone tracker.

IDC said that much of this could be attributed to component shortages and an unusually high 3Q20 comparison base, whereas this year’s post-lockdown demand was addressed by July. However, compared to 3Q19, 3Q21 grew by 3 per cent as channels stocked up for the Diwali quarter amid the supply shortages.

IDC India Research Director Client Devices & IPDS Navkendar Singh said the first nine months of the year (Jan-Sep’21) already shipped 120 million units, with 1H21 clocking 42 per cent YoY growth.

“Due to supply challenges, 4Q21 is expected to see a decline, resulting in annual shipments below 160 million in 2021. 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,” said IDC India Research Director Client Devices & IPDS Navkendar Singh.

Online sales

The report also highlighted other key trends including the fact that online channels clocked a record high 52% share, although with a 5% YoY shipment volume decline.

It also noted that e-tailer sales festivals – including 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 per cent YoY shipment decline. IDC expects online shipments to surpass offline shipments in 2021.

IDC also said that India was the third-largest 5G smartphone market globally with 7% of worldwide 5G shipments, shipping 10 million units at an Average Selling Price (ASP) of $401 (approx. Rs 29853) in 3Q21. From January-September’21, 17 million 5G smartphones were shipped to India and are expected to be under 30 million for 2021.

Popular models

The OnePlus Nord CE, iPhone 12, and Galaxy A22 were the most popular 5G models in 3Q21. Interestingly, it said the sub-$200 segments dropped by 24 per cent, while $200+ smartphones grew by 56%, signalling a shift to higher price buckets, driven primarily by supply.

“IDC believes that a growing dependency on smartphones triggered by remote work and learning, as well as a subsequent requirement for better quality hardware is pushing consumers to spend more. With continued chip shortages and logistics costs, brands are also compelled to expand upwards in terms of price points across channels,” said IDC India Research Manager, Client Devices Upasana Joshi.

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