135118In view of reduced inflation and expenses, will it be right to invest in IT stocks?

Signs of recovery are returning to the Indian smartphone market that rounded off the January-March quarter in 2024 with a growth of 15% on a year-on-year basis, indicated a report released on April 18. The number of phones sold in Q4 of FY24 stood at 3.53 crore.

The report also said that the growth rate in this crucial market is higher due to a favourable base effect compared to the corresponding quarter last year. According to market research firm Canalys, sales during the same quarter in 2023 was impacted by lukewarm demand and spectre of inflation. Unsold inventory moved down following price corrections and vigorous sales promotion in the end of 2023. The reducing stocks also helped the distribution and retail outlets to absorb the new models of different brands during the quarter.

Korean giant Samsung put up a spectacular show. It managed to remain the top brand shipping 67 lakh handsets, thereby putting under its belt 19% market share. Xiaomi and Vivo were joint second cornering 18% of the market each. At the fourth and fifth spots were Oppo and Realme. While Oppo managed 13% market share, Realme won 9%.

Samsung was powered by S24 Ultra, its premium flagship that sold in significant numbers. Its overall shipments rose 6% during the quarter. According to Canalys, Chinese brand Xiaomi recorded a resurgence triggered by budget Redmi phones. It was also helped by its sub-brand Poco’s early launch of the popular X6 series.

“While most brands achieved double-digit growth in Q1, brands outside the top 5 continue to challenge the market share of leading players,” Canalys senior analyst Sanyam Chaurasia told The Economic Times.

Motorola, Infinix, and Apple registered high double-digit growth rates, Canalys observed. “Apple’s growth was driven by its cashcow iPhone 15 model which received multiple price cuts and promotional deals on the e-commerce platform,” remarked Chaurasia.

However, overall sales in the volume-driven mass segment remained sluggish. “In Q1, brands such as Xiaomi, Vivo, and Oppo introduced their latest models…at a higher price compared to the previous generation models,” Chaurasia said. (Q1 refers to January-March quarter which also corresponds to Q4 of FY24.)

Canalys, however, said that there would be a price hike of handsets in the near future, thanks to rising operational cost and higher component costs, and the administration’s policy to localise the manufacturing ecosystem. “Amid the government localization push, vendors must further focus on restructuring local distribution, leveraging local manufacturing partners and appointing Indian leadership,” Chaurasia remarked. The Canalys expert also added that upgrading to 5G sales of premium handsets could be the two drivers of growth in the smartphone market this year.