The first quarter of this year is pathetic for handset makers. The main reason is the increase in Covid-19 cases due to which companies are pressured to limit their production. The rise in cases and fear over the rapid spread of the Omicron variant hurts the consumer’s emotion and affects the demand too.
As per the analyst’s estimation, in January- March period, the shipment of phones is anticipated to reduce by 20% from the quarter’s average of 54-55 million. The shipment of smartphones is likely to drop by 11-14%.
Faisal Kawoosa, Founder of Research firm Techarc, mentioned that strong brands in a specific segment will strive to get 80-90% of their shipments in that segment. He said this in a bid to rationalize the usage of components amid the continuing shortage.
Brands will limit the shipment to 50-60% in any new segment that they are planning to tap to control amid fears of rising Covid cases and stock pileup.
The research firm anticipates, in January- March quarter, the total shipment for mobiles to be 43-44 million approximately. For smartphones, against the average of 35-36 million, the shipment is likely to be 30-32 million for the quarter.
In China and Hong Kong, the already fractured supply chain of components has started to worsen due to the recent restrictions imposed. The IDC stated that the consumers would draw back from purchasing expensive smartphones due to the rise in Omicron and Delta variants.
Upasna Joshi, associate research manager at IDC India, stated that unlike 2021 where no one expected the second wave to hit, consumers are on saving mode, keeping Omicron and its impact on mind, and are cautious of the third wave.
This quarter, with 45 rollouts, the industry spectators await to get impacted by the launch of the handsets. In the January- March quarters of 2019, 2020, and 2021, 60, 46, and 67 phones respectively, were launched. Due to the pandemic, in 2020, the number of launches was low, and in 2021, it was high due to the pent-up demand.
Looking forward to future use, the handset brands were forced to focus on 5G phones due to the lack of chipset.
The month of January to March, the phone sales are less, compared to the festival season starting Diwali, and ending December.
According to the estimation of Canalys, the shortage of chips will carry on in the first half of this year and according to the availability of components, the sellers have to release new models. Compared to the 163 million shipments in 2021, 2022 will end with 179 million.
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