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Tuesday, July 23, 2024

Impact of polls and weather on smartphone sales in Q2

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In Short:

Market experts are predicting slow growth in smartphone shipments for the June quarter due to elections, heatwaves, and floods. Counterpoint Research forecasts a 3-5% decline in shipments, with an annual growth rate of 3%. Canalys also predicts a decline in shipments but believes in potential growth with the introduction of AI smartphones and demand for 5G. Brands may ship over 160-165 million smartphones with the rise of affordable 5G devices.

Market Experts Predict Decline in Smartphone Shipments for June Quarter

New Delhi: Market experts are anticipating a slowdown in smartphone shipments for the June quarter, impacted by the recent elections, heatwaves, and floods. While some analysts are revising their growth outlook for 2024 downwards, others believe that the demand for 5G devices will help maintain sales momentum and mitigate the effects of a subdued first half.

Factors Affecting Shipments

Analysts expect smartphone shipments in the second quarter to be lower than the first quarter due to the impact of reduced launches during the election period, as well as severe heatwaves and floods in certain regions of the country.

Forecasts and Revisions

Counterpoint Research has forecasted a 3-5% decline in shipments for the June quarter, with brands focusing on clearing existing inventory to prepare for the upcoming festive season. The research firm has also revised its annual shipment forecast to 152 million units, predicting a 3% year-on-year growth.

Market Insights

Research analysts point to the prolonged election season, extreme weather conditions, and consumer preference for other appliances like air conditioners and refrigerators as reasons for the subdued smartphone sales in April and May.

Canalys, another research firm, also anticipates a decline in shipments for the June quarter but maintains a growth forecast of 5-6% for the year, driven by the demand for 5G smartphones and AI technology.

Brand Expectations

Research suggests that Samsung is poised for significant growth with its focus on AI technology in smartphones. The brand’s strategy to introduce generative AI in lower-end handsets could stimulate a replacement cycle and drive sales.

TechArc predicts an increase in smartphone shipments to over 160-165 million units, fueled by the availability of affordable 5G devices from Chinese brands. This resurgence in the budget segment is expected to benefit brands like Redmi and Realme.

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