Analysts cut sales forecast for 5G smartphones in India

Industry analysts are lowering their estimates of smartphone sales growth in India, even as telecom operators remain excited about the country’s 5G rollout.

While data from International Data Corporation (IDC) showed companies have shipped 67 million 5G smartphones in India so far, analysts said a total of 80 million 5G smartphones will be shipped by the end of this year, down from the 85-90 million smartphones predicted .

They attributed this to several factors such as high inflation, the drop in smartphone demand, higher prices for 5G devices compared to 4G and also that consumers are beginning to realize that 5G will not bring immediate and tangible improvements to their smartphone experience provides.

“The target could be missed. By the end of the year, the share of 5G smartphone shipments is expected to reach 80 million. This is primarily due to the shortage of smartphones under 15,000,” said Navkendar Singh, associate vice president of device research at IDC India, South Asia and ANZ. “Brands have also failed to offer 5G smartphones at lower prices as supply chain costs are still high due to inflation,” he added. Although the average selling price (ASP) of smartphones fell from $509 in the first quarter of 2020 to $393 in the third Having fallen in Q2 2022, it remains high in a market like India where the ASP stands at $226.

“For mass market adoption, the ASP should be closer to $200. There’s still plenty of time for 5G phones to reach this level. It could happen sometime after next year,” said Tarun Pathak, research director at Counterpoint Research. He said that an average of 15 million 5G smartphones are shipped each quarter. “It may take 6 to 7 months for shipments to reach 100 million.”

Faisal Kawoosa, Founder and Principal Analyst at techARC agreed. “Conditions around the world are not that great. The supply chain has not become so effective that OEMs can save. OEMs are also realizing that it’s better to be in a high-profit zone,” Kawoosa said.

According to a September report by techARC, the true 5G years are yet to come in India, when companies will adopt 5G smartphones €10,000-20,000.

Of course, analysts also said that smartphone demand in India tends to decline every year after the holiday season. In the third quarter, overall smartphone sales fell 10% year over year. Another drop in sales will hit estimated 5G shipments for this year.

abhijit.ahaskar@livemint.com