Parties staying away from mobile bonanza to hit smartphone sales

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This time sales of smartphones before the general elections seems to be sluggish and what has ironically contributed to the subdued sales appears to be an enlightened democratic practice – political parties staying away from promising free handsets to woo votes, The Economic Times has reported.

Though elections usually lift sales, sales analysts told the newspaper that sluggish demand has especially hit the segment below the Rs 20,000 and it has dampened expectations of sales rising this year, especially on account of the arrival of the 5G technology. Counterpoint Research, a prominent market research organisation in smartphones, declined by about 5% (year-on-year) in January and worse, February could not change the sombre mood.

“Post festive season effect, increased replacement cycles and absence of government money infusing policies are some of the reasons for slow demand. If current trends of low demand persist with no correction in shipments, brands will stare at another instance of inventory pile-up in the second half, which will impact annual sales like in 2022,” Shilpi Jain, senior research analyst at Counterpoint Research, remarked. She also said that sluggish demand has defined the market since the beginning of 2024.

Another market research firm IDC India, however, has forecast that shipments would rise from the 3.2 crore handsets shipped in the March quarter of 2023, led by affordable 5G launches and premium flagship handsets. In 2019, the earlier election year, shipments in the first quarter were at 3.1 crore, said IDC.

This research firm also said that the first quarter of any year is usually the weakest in sales. The graph rises from the second quarter and peaks in the run-up to the festive season.

Retailers corroborated the situation conveyed by sales graphs. They said that footfalls in January-February of this year have declined but could rise after March. If political parties hand out cash in their constituents a part of it might trigger smartphone purchase.

Market trackers are still hopeful that political parties could still buy smartphones to distribute them free to lure voters. The campaign for the general elections is just hotting up and once all candidates for all seats are announced, it would start climbing towards a feverish peak.

“Except for a tender by the Uttar Pradesh government for 2.5 million smartphones from Samsung and Lava, there are no other procurement happening that will give a boost to sales and shipments,” Counterpoint’s Jain said.