World’s fastest growing smartphone market is suddenly dipping! Mobile sales have dropped 14.5% in Q1 this year compared to Q4 2014. The data revealed by CyberMedia Research, a consultancy dealing with mobile phone research confirms, the number of handsets sale has dipped to 53 million from 62 million – a slash of 9 million, which is quite alarming.
Experts cited cyclical glitches as reason for this decline. Unexciting phones, tax issues, increased competition and even extended Chinese new-year festivities are some the issues to be blamed for.
“With major announcements of new handsets and entry of some new brands happening in a big way in Q4 2014, there wasn’t really something very exciting in the market for customers that could push up sales in Q1 2015,” said Faisal Kawoosa, Lead Analyst, Telecom Research at CyberMedia. “At the same time, a change in duty structure and the longer continuation of Chinese new year festivities which generally conclude by mid-February each year, affected the supply chain and inventories.”
In an attempt to push local manufacturing, the government, in a budget announcement,increased the excise duty on mobile handsets to 12.5% from 6%, pushing the cost of handsets by around 4%.
Experts said there were two more reasons: First, sales have fluctuated for vendors, with one vendor dominant in one quarter and another in the next. Second, as Kawoosa put it, “a maniacal focus” on online flash sales.
“Though there is an Internet revolution in India and brands do need to focus on building their online base, it only works well for new brands (for example, Xiaomi) willing to enter the Indian market,” said Kawoosa. “Established brands, such as Micromax and Samsung, should focus on their existing legacy. The differentiating strength of these brands lies in their distribution network, built and invested in over the years across India, which they should leverage to increase sales.”