Industry

Handset launches likely delayed, shipments may get impacted as supply crunch, Omnicron loom


The number of mobile phone launches in the January-March quarter will fall by around 20% along with shipments as component shortages and shipment delays continue to plague the sector and brands factor in possible impact of the Omicron variant.

“Stocks are running low and brands are not able to service the sector. Industry will find a way to work around the continuing component shortage but launches in the coming quarter may get delayed”, said Pankaj Mohindroo, chairman of industry body India Cellular Electronics Association (ICEA).

The component supply choke has been building up since the beginning of the pandemic and the new variant has led to further delays in sea and air cargo shipments, as also increased freight rates and container prices.

Techarc founder Faisal Kawoosa was expecting 53 launches in the first three months of 2022 but now says it can come down to 45. He says these three months will be “one of the most challenging quarters” for the industry.

In comparison, the number of phones launched in the January- March quarter of 2019, 2020 and 2021 were 60, 46 and 67 respectively. 2020 was low on account of the pandemic setting in and 2021 was unusually high because of the spillover impact of pent up demand from customers, said experts.

But now, the new variant has forced handset firms to review their stocks and factor in delays as international travels get restricted and cargo may follow.

Japan and Israel have already shut borders on worries over the variant, which first surfaced in South Africa. Australia will delay easing of border restrictions, while Sri Lanka, Singapore, South Korea, Indonesia and Thailand have barred travellers from South Africa.

Research firm IDC said brands are cautious that the next set of launches need to have the volumes and if that is limited, then launches need to be deferred.

“In December, brands are ready with the next three months of allocations. The supply constraints will push dependency towards the second half of the year,” said Up asana Joshi, associate research manager at IDC.

She expects the next three months to clock 35-36 million unit shipments compared to 38 million during the same period in 2021, and 33 million in 2020.

“Since the Diwali quarter with discounts was good, many consumers may also not look out for new purchases,” she added. India clocks 60% of its handset sale during the Diwali led festive season.

The October-December quarter is expected to close at 36-37 million compared to 47 million in the July-September quarter, which saw huge shipments as brands built up inventory ahead of the festival season. The annual smartphone shipments in India for 2021 are expected to be 160-168 million units.



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