Due to the ongoing sharp decline in sales over the past six months, mobile phone firms have decreased their production capabilities by up to 20% year over year between January and April, according to industry officials.
According to the most recent statistics from market researcher Counterpoint, smartphone shipments, a proxy for sales, fell by 18% in January2023 – March 2023 and by 30% year-over-year in the period between October and December 2022. Reliance Retail, the largest mobile phone retailer in India, also said that device or mobile phone sales had slowed in the January to March quarter.
Companies have reduced output by 15-20%, especially so in the entry- and mid-tier categories because the premium market is still robust, according to Tarun Pathak, director of research at Counterpoint.
While the industry had used similar cuts the previous year in April through July and again post-Diwali in November through December, this production cut is the first of the calendar year. Executives from the sector claimed that these cuts were still lower than the present levels, at 5–10%.
Atul B. Lall, managing director of Dixon Technologies, India’s largest domestic third-party electronic maker, stated that although the demand for mobile phones is not strong, a severe fall has not yet occurred because some businesses are still exporting handsets from India.
The majority of the inventory from the previous generation was sold by year’s end despite a tough 2022 in which demand was weaker than anticipated, according to Muralikrishnan B, president of Xiaomi India.