Smartphone makers get disconnected again

Smartphone companies are staring at a loss of around 5 million shipment units in April-June, with a sales washout expected due to the 15-day shutdown in Maharashtra and restrictions in other states such as Chhattisgarh and Madhya Pradesh.While expecting sales to be hit this quarter, brands are maintaining production and hoping for a strong bounceback in demand when restrictions are lifted, similar to what happened in 2020. Transport of components and finished goods, though, is being delayed due to night curfews and other regional restrictions, industry executives said.The Maharashtra government on Wednesday disallowed even ecommerce companies from delivering smartphones in the state, which accounts for about 10% of total sales in India. This will add to the woes of brands — offline smartphone retailers are being forced to shut as rules allow only sale of essential goods. In Madhya Pradesh, offline retailers are lobbying with chief minister Shivraj Singh Chouhan to enforce the same curbs on ecommerce as in Maharashtra, ensuring that online and offline are on equal footing.Industry OutlookTarun Pathak, associate director at Counterpoint Research, said the second quarter will see a 15% drop over the agency’s previous estimates of 37-39 million shipments. “It is roughly a washout of 5 million shipments. We have taken Maharashtra lockdown and other factors into consideration. However, we are not changing annual predictions since demand could be resilient,” Pathak said.Xiaomi, India’s top handset brand, said it expects brief impact on sales due to lockdowns in some parts of the country. “In case any state enforces lockdown, we anticipate impact on sales to be short-lived. We will be able to bridge the demand gap once the market opens up,” said a company spokesperson.Some Impact EvidentSanjeev Agarwal, chief manufacturing officer at Lava International, told ET the brand is already seeing an impact on sales. “If the current situation persists, we might face more challenges in the coming days,” he said. “The pandemic has disrupted the global supply chain. We are facing components shortage as well as an escalation in their prices.”Realme India also said there will be some impact for a period since a few cities have started applying lockdown conditions again. A spokesperson flagged the chipset shortage issue, saying Realme is making its “best efforts” to meet demand. “Incoming shipments are not impacted because 80% of components for the industry is imported by air cargo, but outgoing supplies in the market are suffering some delays,” said Amrit Manwani, MD, t Sahasra, which assembles printed circuit boards. “Logistics partners are taking longer routes to avoid regional curfews, which might sometimes lead to lost cargo as well.”

from Economic Times https://ift.tt/3uUHZpw