Rediff.com« Back to articlePrint this article

Mobile firms stare at gloomy festive season

September 25, 2020 11:10 IST

Though leading brands like Samsung, Apple, Xiaomi, OnePlus, and Oppo managed to absorb the initial lockdown shock and resumed their local production back to 60 per cent, they would likely suffer a 20-25 per cent loss of sales in the October-December quarter.

With the Covid-19-triggered economic disruption resulting in mass layoffs, salary cuts, and GDP contraction, smartphone manufacturers are staring at a subdued festive season this year.

According to industry sources, though leading brands like Samsung, Apple, Xiaomi, OnePlus, and Oppo managed to absorb the initial shock and resumed their local production back to 60 per cent, they would likely suffer a 20-25 per cent loss of sales in the October-December quarter.

 

The current quarter (July-September) is traditionally the largest in terms of volume shipment as all leading players fill up their inventory in anticipation of bumper sales in festive weeks.

Since 2015, shipments have touched new highs every year during the quarter.

This year, however, trends show shipments are, so far, less by up to 25 per cent from last year’s record 47 million units.

“This year has been challenging and there has been a disruption in the overall supply chain since May.

"However, we continue to work hard with our suppliers and factories to ensure that we bring out adequate quantities for our users and Mi fans this Diwali,” said a spokesperson from Xiaomi India, the top player in the country’s smartphone market.

Handset majors are leaving no stone unturned to recover some the sales lost during the first two quarters of FY21.

Once the market leader, Samsung has already launched its flagship Galaxy Note 20 series for the season.

Rival Xiaomi has forayed into the premium segment (above Rs 45,000) with Mi 10 this year to challenge to Samsung, Apple, and OnePlus.

According to the Xiaomi India spokesperson, the company is now gearing up to launch another flagship in the segment.

Another Chinese major Oppo is ready with its Find X2 offering,  while OnePlus is increasing its bet with 8T and Nord100 models.

Though Apple had to postpone the launch of its iPhone 12 series because of supply disruptions, industry watchers say it may not lose out to Samsung despite the delay.

According to sources, Apple is planning to launch the new iPhones by early-October.

As both Navratri and Diwali are scheduled only after mid-October, Apple’s sales are expected to remain immune.

“Apple has its own fan base that will buy iPhones no matter when they are launched,” said Faisal Kawoosa, lead analyst at TechArc.

To improve the top-line numbers, the firms, however, will have to bank on their mid-to-semi-premium (Rs 15,000-30,000) range in festive weeks.

According to Navkendar Singh, research director at IDC, this time consumers are unlikely to spend more than they need to.

Thus, selling premium devices in larger quantities, like past seasons, will be difficult.

“This year, flagships may primarily help companies in expressing their brand weight and give them mileage in terms of better consumer preferences.

"But it is the mid-to-semi premium segment that is going to drive sales”, he said.

Moreover, brands may have to lean on better consumer schemes and discounts this time.

Samsung is already offering discounts and cashback up to Rs 19,000 on its new Note 20 handsets.

Xiaomi is working on lucrative offers and schemes, the spokesperson said.

Photograph: Andrew Kelly/Reuters

Arnab Dutta in New Delhi
Source: source image