Smartphone shipments in India fell 13% in Q2 due to Covid-19

Pedestrians walk past a Xiaomi Corp. store and a Samsung Electronics Co. store in Mumbai, India.

Dhiraj Singh | Bloomberg | Getty Images

Smartphone makers shipped about 32.4 million devices in India between April and June, according to research firm Canalys.

That was about 13% fewer handsets shipped compared with the previous three months. A devastating second wave of Covid-19 in India between February and May prompted regional lockdowns and created economic disruption that ultimately stifled smartphone demand.

“Smartphone vendors in India had assumed Covid-19 would not return, and several planned to invest in infrastructure for branded stores and partnerships with third-party offline channels,” Sanyam Chaurasia, an analyst at Canalys, said in a statement. “But once again they were quickly compelled to pivot to an online strategy.”

On a yearly basis, smartphone shipments jumped 87% as India was under a strict national lockdown for most of the April-June period last year.

Xiaomi still in pole position

Signs of recovery

Canalys said signs of a recovery in the market emerged toward the end of the second quarter due to a boost in consumer confidence from India’s aggressive vaccine push in key areas. The research firm expects a rebound in the second half of the year as brands expand their promotional activities and release new devices.

“But the second half will not see a surge in pent-up demand like last year. The threat of a third wave still looms in India, but as citizen behavior and industrial operations continue to adapt to pandemic conditions, its impact should be minimal,” Chaurasia said.

Smartphone makers will likely also face challenges including increasing costs, limited supply of parts — such as memory chips — rising shipping charges and a tough economic environment, according to the research firm.

Chaurasia explained that the shortage of components adds to the risk of regional de-prioritization, where the smartphone makers may look to allocate their limited supplies of devices to more lucrative, high-end markets.

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