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Inflationary worries are impacting consumer sentiment (Photo: Bloomberg) Inflationary worries are impacting consumer sentiment (Photo: Bloomberg)

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Smartphone growth to be muted in 2023 – Crypto News

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NEW DELHI : India’s smartphone market is expected to remain subdued in 2023 as inflationary concerns weigh on consumer sentiment, industry experts said.

Earlier this month, analysts reported a year of drop in industry shipments in 2022. This year, may either remain flat or grow in low single digits, the experts said.

Counterpoint Research said in a report on Friday that smartphone shipments in India fell 9% to 152 million shipments in 2022. Shipments grew 11% in 2021 to 169 million units as the pandemic led users to buy smartphones for remote work and education. While an analyst from the International Data Corporation (IDC) predicted a flat 2023, a Counterpoint analyst forecast single-digit growth at best. Retailers also reported lower store footfalls.

Prachir Singh, senior research analyst at Counterpoint, said the increasing life cycle of smartphones was “an expected factor in the market”, in a reference to users holding on to their devices for longer than usual. India users used to have a six-month refresh cycle till 2020, but this has risen to nearly 24 months currently.

Smartphone shipments have been on the decline since the quarter ended December, 2021. Data sourced from Counterpoint showed smartphone shipments fell 30% from a year ago in the December quarter amid weak demand post the festive season.

“Going forward, what will happen is that brands will start focusing on increasing revenue, or value, from India’s smartphone market, which has seen the average selling price (ASP) of smartphones go up steadily through 2022, and the same will happen in 2023 as well,” Navkendar Singh, associate vice-president at IDC, said.

According to Counterpoint’s Singh, the average selling price (ASP) of a smartphone rose nearly 17% from a year earlier to nearly $250 (about 20,000) at the end of 2022, from $225 (about 17,000) at the end of 2021. He added that 2023 is likely to see a further single-digit growth in smartphone ASPs, even as shipments remain flat through the year.

Others, however, expect shipments to fall this year as well. IDC’s Navkendar Singh said “consumer smartphone shipments will decline in low single-digit through 2023”, and added that the drop is likely to continue despite the launch of more affordable 5G phones. This will be fueled by brands struggling to sell 4G devices above 10,000 currently, while shipments of affordable 5G phones remain low, forcing users to either use their existing phones for longer, or consider the refurbished and used electronics market instead of buying a new smartphone.

Manish Khatri, partner at Mumbai-based electronics retailer Mahesh Telecom, agreed. He said consumer demand through the end of 2022, especially post October’s festive season sales period, has remained “very low”.

“The industry presently does not expect to see consumer demand recovering, unless the market sees an influx of affordable 5G phones. While the overall device supplies are more or less normal, shipments of affordable 5G smartphones such as the Samsung Galaxy M13 (launched in July last year at 13,999) and the Vivo T1 (launched in May last year at 15,990) are slim right now — thus preventing high buyer interest. Unless more such devices come to the market in ample supply, 2023 is unlikely to see a rise in buyer interest,” he added.

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