Jaina India Managing Director Pardeep Jain told ET that because of the shortage of components and consequent skyrocketing of their prices, Karbonn’s smartphone re-entry plans have been impacted.
“We are now targeting March 2021 to launch our phones in the Rs 6,000- Rs 10,000 price category. With the government’s policy, we are now focusing on increasing visibility of Karbonn in the market. We have increased investments in R&D already,” said Jain.
Jaina Group owns the Karbonn brand and also has the licence for Gionee and Sansui in India.
The supply constraints, which started in mid-2020, have driven up prices sharply of key components such as displays, which is making it difficult for brands to manage bill of materials, especially for sub- Rs 10,000 phones. Ocean freight charges have also increased by three times in the past 10 months, which is not expected to ease out in the near term, executives say.
“The biggest challenge for Indian brands is planning because there is no visibility for next 2-3 months for sourcing components,” said Tarun Pathak, research director at Counterpoint. “Global brands get priority whenever there is a supply crunch because of their volumes but for Indian companies it becomes tougher, especially when they are competing in the sub-`15k segment with low margins and huge competition.”
Indian handset brands hold less than 1% share in the smartphone market, which is close to 154 million units by volume and dominated by Chinese bands such as Xiaomi, Oppo, Vivo and Korea’s Samsung. Backed by the government’s production-linked incentive (PLI) scheme, Lava, Karbonn and Micromax have been trying to launch new smartphones—especially in the under-`10,000 price segment-—to gain some share. But the acute component shortage is hurting their efforts.
Sunil Raina, president of Lava International, said that while the chipset shortage situation is easing out, there is a severe shortage of displays in the market. Lava has recently re-entered the smartphone space.