Entry-level, refurbished smartphone sales estimated to increase post lockdown


Due to the ongoing coronavirus pandemic and the extended nationwide lockdown, smartphone sales have taken a hit and are expected to plummet even further through 2020.

Consumer spending is also expected to cut down, further leading to speculations on the rise in the purchase of affordable and refurbished smartphones.

Consumers are likely to purchase affordable and refurbished smartphones for immediate needs, which could increase the share of entry-level (under Rs 5,000) and basic smartphones (between Rs 5,000 and Rs 10,000) in India. Counterpoint Research speculates that these two segments are likely to hold their market share as the demand increases. 

Neil Shah, research director at Counterpoint told The Economic Times that the research firm speculates a diffusion across price brands. “The trend will be trickling down, especially from Rs 10,000 to Rs 8,000 and gradually to Rs 5,000 as need for number of phones per family goes up while budgets get trimmed as income-cuts or job-cuts play out,” he said.

Notably, the entry-level segment had just 4 percent market share in 2019, down from 12 percent in 2017. Even smartphones priced between Rs 5,000 and Rs 10,000 had a market share of 42 percent in 2019. The report further estimates a 10-15 percent decline in the Average Selling Price (ASP) for smartphones, which is currently at $180.

On the contrary, International Data Corporation (IDC) predicts that the ASP may rather rise, citing the recent GST hike from 12 percent to 18 percent on smartphones by the Indian government. Several brands have already increased the price of their devices, including basic and entry-level smartphones.

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Currently, smartphone sales have stopped online and are reportedly zero in the offline market as well, owing to the nationwide lockdown. Both retailers and analysts do not expect smartphone sales to pick up until later this year.

US-based market research firm Frost & Sullivan expects smartphone markets to only rebound by November or December 2020, while maintaining a shallow demand in Q2 2020.

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