Friday, 22 April 2022 11:17

India mobile market grows just 2% in 1Q2022 due to supply constraints

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India mobile market grows just 2% in 1Q2022 due to supply constraints Image by Gerd Altmann from Pixabay

Supply constraints have kept the Indian smartphone market to just 2% growth in the first quarter of the year, the technology analyst firm Canalys reports, adding that 38.0 million smartphones were shipped.

India is the second biggest market for mobiles, after China, and vendors were hit by intermittent supply issues during the first three months of 2022, Canalys claimed.

As usual, Chinese brands dominated, with Xiaomi holding on to the first spot with eight million units shipped, a drop from its showing in the previous quarter.

Samsung shipped 6.9 million units, the best growth among the top five vendors, 40% up year-on-year.

realme shipped 6.0 million units, followed by vivo (5.7 million units) and OPPO (4.6 million units) to make up the top five.

india mobiles 1q 2022 canalys

“This is not a great start to the year for a market like India, which has seen double-digit percentage growth even during the pandemic,” said Canalys analyst Sanyam Chaurasia.

“While most of the world’s markets battled the third wave of COVID-19 in 1Q, the relatively weaker impact on India should have helped it return to growth quickly.

"But supply remained the biggest challenge for the leading vendors, such as Xiaomi and vivo, and they struggled to secure components for their volume-driving low-end models.

"By contrast, brands such as realme, Tecno and Itel did remarkably well with solid supply to take on the market leaders and fulfill the low-end demand in 1Q.”

Chaurasia said vendors were taking steps to address the supply bottleneck.

“Sell-in started to improve from March. Channel companies are optimistic about healthy sell-in in 2Q, with vendors preparing for a strong festive quarter," he said.

india mobiles 1q 22 canclys

"They are finding opportunities in the lower-tier cities and towns in India, where device penetration is still relatively low. It is more important than ever for vendors to focus on building a long-term offline channel strategy.”

Chaurasia said the biggest challenge that vendors would face this year would be maintaining device affordability.

“Oil prices in India are at an all-time high and wholesale inflation remains elevated, at 14.6% in March. Volatility in foreign exchange rates and higher operational costs due to inflation will, in turn, put further pressure on vendors to maintain profitability.

"But as consumers increasingly rely on their smartphones, enticing them with payment schemes has never been easier, with multiple buy-now-pay-later partners mushrooming across the ecosystem.

"The mass market will remain India’s growth engine, and having a healthy portfolio in the mid-to-low-end segment will be key to maintaining strong consumer mindshare in 2022. Availability, affordability and attractiveness will be essential for smartphone vendors to succeed as multiple uncertainties lie ahead.”

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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