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According to data released by the government of India, the rise in smartphone exports, and positive consumer behaviour illustrates that this sector is driving India's growth story.
India's strategy of reducing imports, while espousing the benefits of Atma Nirbhar Bharat, is paying dividends and the latest data released by the government in the local production of smartphones shows that this sector is inching to a healthy state with exports recovering to pre-Covid levels and imports falling by around half from the high levels it had reached in June.
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With the fashioning of consumer habits a blow has been struck against the bricks-and-mortar retailers whose business has suffered greatly during the pandemic which has also fashioned a customer's shopping habits. Buying has gone strictly e-tail.
According to Invest India, The Telecom industry in India is the second-largest in the world with a subscriber base of over 1.2 bn. The industry has witnessed exponential growth over the last few years primarily driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers and a conducive regulatory environment. Indian smartphone users consume maximum data in the world at 12GB/month and which could increase to 25 GB/month by 2025.
According to records put out by the Ministry of Commerce (MoC) smartphone exports in the month of August totalled Rs 1781.1 crore by value, higher than March′s Rs 976.3 crore. Imports, though, were Rs 1050.1 crore, higher than March′s Rs 13.4 crore.
However, this has been reducing since June, when it had recorded a three year high of Rs. 2225.2 crores.
Annual comparisons coinciding with last year's festive season indicated that imports of smartphones to India have aligned with the usual trend. The Ministry of Commerce contends that imports of Rs. 1984.7 crore were recorded in August last year which were similar to current figures.
Local production has gone up to 80-85% capacity which is ideal given the current demand. According to Reuters, the fact that Reliance Industries Ltd′s telecom unit is looking to outsource the manufacturing of over 100 million low-cost smartphones that will be built on Google′s Android platform will be music to the ears.
The phones, which will be bundled with data packs, could be launched in December 2020, or early next year.
Buoyed by foreign investment which has been coming in from the top global brands Reliance has seen its stock boosted through big ticket interest like Google which will invest $4.5 billion in its digital unit. Reliance owner Mukesh Ambani has stated that Google would build an Android operating system (OS) to power a low-cost "4G or even 5G" smartphone that Reliance would design.
Industry sources have commented that “The smartphone industry has seen off the worst of the economic slowdown which included a month-long shutdown, spread of Covid, customs scrutiny and labour shortage.
Reliance has sold nearly 33% of its digital arm, Jio Platforms for around $20.22 billion and has support from blue chip global financial and tech players.
Industry sources have commented that “The smartphone industry has seen off the worst of the economic slowdown which included a month-long shutdown, spread of Covid, customs scrutiny and labour shortage. This had impacted the ability of brands to launch new models which would have added to the attractions of the upcoming festive season.
The industry is perfectly capable of coming back to normal and this is argued by the logic that in pre-Covid times 95 percent of the devices sold in India were assembled locally. In fact, given that demand and supply are both achieving a perfect balance it would indicate that the imports will go down as local manufacturing units raise their capacities.
The month of September could see sales of smartphones climbing past 15 million, which will equal last year's sales. When this year is over sales could hit approximately 130-135 million against last year's 154 million which, under the stressful pandemic related circumstances, is not a bad report card at all.
Consumer habits do not seem to be affected in the smartphone sector. The will to purchase remains strong. E-tail is dictating customer preferences, under the shadow of the pandemic, and companies are cashing in with innovative marketing and sales techniques.
Apple Inc launched its first online store in the hope that the festive season will being in huge sales numbers. Apple assembles some of its smartphone models, including the iPhone 11, at Taiwanese contract manufacturers Foxconn and Wistron′s plants in south India. According to Reuters, Foxconn plans to invest up to $1 billion to expand a south India factory where it assembles iPhones.
Apple uses third-party vendors to sell its products in India and this is also where e-commerce platforms like Flipkart come into play. Amazon is also rumoured to be negotiating a prospective collaboration with the Reliance Group.
According to Reuters, through its online retail platform, Apple plans to offer assistance to customers in English and Hindi, while allowing users to personalise some devices, including iPads, with engravings.
With the fashioning of consumer habits a blow has been struck against the bricks-and-mortar retailers whose business has suffered greatly during the pandemic which has also fashioned a customer's shopping habits. Buying has gone strictly e-tail.
The smartphone sector is appearing to be the sweet spot in Indian manufacturing. Small players are coming into their own and the birth of manufacturing outlets and generation of employment is a case in point. Noida in Uttar Pradesh, which was once the headquarters for tech outsourcing entities, has been overrun by companies making everything from headphones and chargers to high-end smartphones.
Indians are reliant on using data and used about 12 GB per month on an average in 2019.This was the highest consumption globally and the numbers would rise to about 25 GB per month by 2025.
According to reports only 4 percent of households in India have access to fixed broadband, smartphones therefore are a solid option to access the internet. Indians are reliant on using data and used about 12 GB per month on an average in 2019.This was the highest consumption globally and the numbers would rise to about 25 GB per month by 2025. Keeping sync with data usage a total of 410 million smartphone users would be added into the market by 2025.