In Q1 2021, the smartphone industry reaches new highs in shipments; second wave continues to dampen supply in the coming quarters

While the second wave of Covid infections disrupts normal life in India, the domestic smartphone market may see a drop in sales after three-quarters of strong growth. According to analysts, the second wave of infections would have a negative effect on market demand in the coming quarters.

As per Counterpoint Research, smartphone shipments in India increased by 23% year over year to more than 38 million units in Q1 2021, the highest first-quarter shipments ever. In Q1 2021, the market was driven by new product releases, promotions, and financial schemes, as well as pent-up demand from 2020.

“However, these figures should be interpreted with caution since a second, more virulent wave of Covid-19 is currently circulating in the country and is expected to affect the coming quarters. Due to the ongoing Covid-19 wave and subsequent lockdowns, market demand will suffer,” Counterpoint Research senior research analyst Prachir Singh said.

The second and more lethal wave of the pandemic, as per analysts and economists, has already begun to affect the flow of people and commodities. Many people are concerned that the increasingly increasing caseload would harm India's economic growth, as well as consumer sentiment.

Chinese smartphone vendors dominated 75% of the Indian smartphone market as of March 2021. “With a 26% market share, Xiaomi led the pack, followed by Samsung, Vivo, Realme, and Oppo. Xiaomi recently added new EMS partners to its manufacturing capabilities, which helped the brand sustain good shipments throughout the quarter,” says Shilpi Jain, a Counterpoint Research analyst.

To fuel customer demand, all major brands are focused on new product releases. During Q1 2021, Samsung continued to introduce a large range of new products in its Galaxy M-series, Galaxy F-series, and Galaxy S21 series. Realme introduced the 8 series, OnePlus introduced the 9 series, and Xiaomi introduced the Redmi Note 10 series.

During the quarter, the feature phone market grew by 14% year over year, owing to strong shipments of JioPhone under its latest model and subsequent promotions. Itel, on the other hand, had a 21% market share in the feature phone market in Q1 2021.

From Q4 2020 to Q4 2021, Apple maintained its momentum. With nearly 48% market share in the premium segment (> `30,000), the company retained its lead. The growth is being fueled by strong demand for the iPhone 11, as well as aggressive deals on the iPhone SE 2020 and the expansion of ‘Make in India' capabilities. For the first time, Apple shipped more than one million units in two consecutive quarters.