Smartphone market jumps back to life after GST hiccup

With the disruption due to the goods and services tax (GST) behind them and the festive season imminent, smartphone manufacturers have started launching new devices. According to industry estimates, over 250 new smartphone models will be launched by October.

Launches were put on hold since June as stock clearance and GST compliance took over. During the past two months, bringing channel partners on board consumed a large chunk of time and resources for handset makers.

However, nearly two dozen launches by major brands like Panasonic, Gionee, LG, Intex and Lenovo have taken place in the last 10 days.

Japanese electronics major Panasonic, which has lined up 11 launches for the next 30 days, says the trade is ready for festive sales. “There was lack of clarity on certain aspects, but now things are moving smoothly and logistics and stock transfers have become easier. We are meeting all trade partners to discuss plans for the festive months,” said Pankaj Rana, business head, mobility division, Panasonic India.

According to Alok Shrivastava, director, business intelligence and planning, Gionee India, the company will launch up to eight handsets in the coming months. Gionee earlier this week launched a smartphone in its top-selling A1 series.

Much-awaited devices like Apple’s iPhone 8 and Samsung’s Galaxy Note 8 are expected to hit the market by October. Samsung has lined up half-adozen launches before Diwali.

At present, Samsung has an over 50 per cent market share of handsets priced above ~30,000 and Apple has a little over 30 per cent share.

However, analysts predict changes once the new iPhone model arrives India in early October.

Other brands like Vivo, Xiaomi, Lava, Voto and Comio are gearing up for their launches before October. This year, the festive season begins in late August, unlike last year when Onam fell in September.

The dynamics of the market have also changed. Last year, over 300 smartphone models were launched during the festive months, but the number is expected to be lower at 280 in 2017.

According to Tarun Pathak, associate director, Counterpoint Technology Research, companies are focusing on slimmer portfolios. “The average selling price of handsets, on the other hand, is rising steadily,” he said.

The average selling price of smartphones rose to ~8,800 in January-March from ~7,600 in the same quarter a year ago. With a focus on the affordable ~10,000-15,000 segment this season, the average selling price of handsets might approach ~10,000 by the year-end, experts said.