The extension of the lockdown will “obviously” improve the loss for handset producers, however this era has additionally helped individuals realise the worth of cellphones, mentioned Pankaj Mohindroo, Chairman, ICEA.
However, revenues of smartphone makers will proceed to take a success as the federal government on Sunday determined to not open e-commerce channels for the gross sales of non-essential objects like cellphones from Monday as earlier introduced.
Sales of cellphones are actually anticipated to renew after the top of the lockdown interval on May 3.
“These are uncertain times. But it seems that people will make a beeline for smartphones (after the lockdown) because they saw in the lockdown that one could make an enterprise survive by merely having a smartphone. Education also shifted to smartphones,” Mohindroo informed IANS in an interplay over telephone.
“People realise the great value of it now. So we do not see demand going down too much,” he mentioned.
The demand, ICEA predicts, will keep wholesome for entry degree and premium telephones.
“The entry-level smartphones (under Rs 10,000) will be very well positioned. The feature phones will also have a very good market because people who do not have a mobile phone will now start buying one,” Mohindroo mentioned.
However, mid-level telephones could face challenges of demand. What has elevated the woes for the business is the rise in GST and fall of rupee in opposition to the greenback, he mentioned.
Several smartphone producers like Apple, Xiaomi, Realme and Vivo earlier this month introduced their determination to extend costs of their gadgets in India as a result of GST hike on cellphones from 12 per cent to 18 per cent which grew to become relevant from April 1.
According to ICEA, whereas the worldwide corporations will finally have the ability to tide over the challenges that they’re going through as a result of uncertainties led to by the coronavirus pandemic, it may very well be far harder for the Indian cell phone producers.
“The global companies have a fairly large share of the Indian market… Challenges will be very acute for Indian companies or the smaller manufacturers or component manufacturers,” Mohindroo mentioned.
“The biggest concern is the cash flow. Down the road, the revenue may not be of normal level. Overheads are there. And if they have to produce with a smaller workforce, it will be a difficult one because your plants are configured for a certain capacity of operations. So very tough times,” he mentioned.
What is inflicting plenty of stress to the business is that the retail shops will not be open as a result of lockdown, he mentioned.
However, “make in India” could get a lift in a post-lockdown situation as “confidence in China has gone down tremendously” and main corporations wish to shift their manufacturing base out of China, Mohindroo mentioned.
With 158 million smartphone shipments in 2019, India surpassed the US to develop into the second-largest smartphone market globally after China, based on Counterpoint Research.