Demand for mobile phones won’t fall sharply in India

new delhi — While the lockdown due to the Covid-19 pandemic has led to production loss of an estimated over ₹150 billion for the Indian handset manufacturing industry, there will be no sharp decline in demand for mobile phones in a post-lockdown scenario, predicts industry body India Cellular and Electronics Association (ICEA).

The extension of the lockdown will “obviously” increase the loss for handset manufacturers, but this period has also helped people realise the value of mobile phones, said Pankaj Mohindroo, chairman of the ICEA. However, revenues of smartphone makers will continue to take a hit as the government on Sunday decided not to open e-commerce channels for the sales of non-essential items like mobile phones from today as earlier announced.

Sales of mobile phones are now expected to resume after the end of the lockdown period on May 3.

“These are uncertain times.

But it seems that people will make a beeline for smartphones [after the lockdown] because they saw in the lockdown that one could make an enterprise survive by merely having a smartphone. Education also shifted to smartphones,” Mohindroo told IANS in a telephone interview.

“People realise the great value of it now. So we do not see demand going down too much,” he said.

Demand, the ICEA predicts, will stay healthy for entry-level and premium phones. “The entrylevel smartphones [under ₹10,000] will be very well-positioned. Feature phones will also have a very good market because people who do not have a mobile phone will now start buying one,” Mohindroo said.

However, mid-level phones may face challenges of demand. What has increased the woes for the industry is the increase in GST and the fall of the rupee against the dollar, he said.

Several smartphone manufacturers like Apple, Xiaomi, Realme and Vivo earlier this month announced their decision to increase prices of their devices in India due to the GST hike on mobile phones from 12 per cent to 18 per cent, which became applicable from April 1.

According to the ICEA, while global companies will eventually be able to tide over the challenges that they are facing due to the uncertainties brought about by the coronavirus pandemic, it could be far more difficult for Indian mobile phone manufacturers. —