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October 1, 2023


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Analysts trim India 5G smartphone sales projection

2 min read

Industry analysts are lowering their estimates on sales growth of smartphones in India even as telecom operators remain enthused about 5G rollouts in the country.

While data from the International Data Corporation (IDC) showed that companies have shipped 67 million 5G smartphones in India so far, analysts said a total of 80 million 5G smartphones are expected to be shipped by this year-end, lower than the 85-90 million smartphones forecast earlier.

They attributed this to several factors such as high inflation, fall in smartphone demand, higher prices of 5G devices compared to 4G, and also that consumers are starting to realize that 5G doesn’t offer immediate and noticeable improvements in their smartphone experiences.

“The target might fall short. By the end of the year, the share of 5G smartphone shipments is expected to reach 80 million. This is primarily due to the lack of sub-15k smartphones,” said Navkendar Singh, associate vice president for devices research at IDC India, South Asia and ANZ. “Brands have also failed to bring 5G smartphones at lower price points as supply chain costs are still high due to inflation,” he added. Though the average selling price (ASP) of smartphones has fallen from $509 in Q1 2020 to $393 in Q3 2022, it remains high in a market such as India where the ASP is $226.

“For mass market adoption, the ASP should be closer to $200. There is still a lot of time for 5G phones to reach that level. It might happen sometime after next year,” said Tarun Pathak, research director at Counterpoint Research. He said on average, 15 million 5G smartphones are shipped every quarter. “It may take 6 to 7 months for the shipments to reach 100 million.”

Faisal Kawoosa, founder and chief analyst at techARC concurred. “The conditions are not that great globally. The supply chain has not become that effective which will allow OEMs to economize. OEMs are also realizing that it is better to be in a highly profitable zone,” said Kawoosa.

According to a September report by techARC, the true 5G years are yet to come in India that will see companies introduce 5G smartphones at 10,000-20,000.

To be sure, analysts also said that smartphone demand in India tends to drop after the festive season every year. In Q3, overall smartphone sales fell 10% from a year ago. A further decline in sales will hit the estimated 5G shipments for this year.

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