indica News Service
There has been a downswing in the smartphone market in India and this started much before the coronavirus outbreak. The downswing in the smartphone market is likely to be deep and may last longer than in China as per a new report.
The smartphone market in China saw a sharp hit in January and February but was already recovering before the end of March as supply chains and retail activity returned to normalcy.
According to Counterpoint Research, the market for smartphones will go down in India and it will be worse in the 2nd half of the year.
Peter Richardson, Research Director at the Counterpoint said:
“It may be as deep as China’s sharp slowdown but will likely last longer. Unlike China, where at least a part of the slowdown was supply-driven, the rest of the world’s contraction is driven more by consumers withholding replacement activity until they get more comfortable with the new economic realities of their situation.”
The smartphone production in India is set to decrease by nearly 30 percent for the month of March amid lockdown as smartphone manufacturing units are now shut nationwide.
Assuming the lock-downs ease within a few weeks, the recovery should be strong, he said, though we can expect some consumers to change their spending patterns.
The world is officially in a global recession as declared by the International Monetary Fund (IMF). According to the IMF chief Kristalina Georgieva, the global growth will turn sharply negative in 2020, and over 170 countries will experience negative per capita income growth this year.
However, the impacts are likely to be felt differently among developed and developing countries.
“In India, the government acted with great speed to lock-down the country. But in so doing, it seemed to forget the millions of migrant and casual laborers that make up a large percentage of the workforce. Many found themselves not only jobless, but also homeless – more or less overnight,” said Richardson.
The governments of emerging economies are not strong enough to support their populations or corporations during lengthy shutdowns. And worse, capital is fleeing to safe havens, which has meant the US dollar, almost exclusively.
“Companies may be able to reduce the size of office space as they realize that as many as a third of employees can work effectively from home on a near-continuous basis,” said Richardson.