Home / Technology / Gadgets /  Pricier 5G smartphones see demand spurt in festive sales

NEW DELHI : The impending launch of fifth-generation or 5G telecom services in the country has led to booming sales of smartphones featuring the latest technology during the ongoing festive season sales by online and offline retailers.

According to industry experts and analysts, nearly two out of every five smartphones sold in the first week of the festive sales were 5G devices, marking record market share for such phones in India. “The share of 5G phones among all smartphones sold in the first week should be anywhere between 30-40% of all phones sold. This share, however, could have been larger — but a large pending inventory of over 10 weeks has seen retailers extend offers to 4G phones in the budget segment," said Tarun Pathak, research director at market researcher Counterpoint India. He, however, added that a larger share of 5G phones in the overall pie will lead to an increase in the average selling price (ASP) of smartphones in the domestic market. “Given that 5G devices have largely come in at higher prices, we should see the ASP rise by around 10-12% in the first week of this year’s festive sales," he said.

According to Pathak, the first week of festive sales last year saw the ASP of smartphones at around 15,500—which can potentially rise to 20,000 due to a larger proliferation of 5G devices this year.

The first week of festive sales typically sees a higher ASP every year, buoyed by consumers looking to cash in on deals and discounts on premium devices such as Apple’s iPhones and Samsung’s flagship Galaxy S series.

However, while larger sales of budget phones typically outweigh premium phones eventually, analysts say that 5G devices could fuel an increase in the ASP of smartphones this year. The higher ASP comes as a boon as the overall smartphone market has remained subdued this year. Consequently, despite the flat sales trajectory, smartphone sellers should post revenue growth this year.

Sanjay Kothari, associate partner at market research firm Redseer, said the gross merchandising value (GMV) during the first week of festive season smartphone sales could see a 20% growth from the year earlier, driven by increased sales of pricier 5G devices.

“While you have the likes of Apple and OnePlus pushing premium smartphone sales with heavy discounts, the budget 5G smartphone sector has also seen good demand," he said. Manish Khatri, partner at Mumbai-based retailer Mahesh Telecom, said in the budget segment, Samsung has seen strong demand due to deals that have reduced prices of basic 5G phones to less than 15,000. “On the other hand, you have massive discounts on phones such as the Samsung Galaxy S22 Ultra and S20 FE, which has seen Samsung witness strong demand during this period," he said.

The festive season—which industry stakeholders count as a five-week period from the last week of September to end-October every year — is the most valuable period for India’s smartphone industry. These five weeks account for nearly one-fifth of the entire year’s smartphone sales, thus making it a crucial period for brands.

This year’s festive season has been deemed even more significant, since smartphone shipments in the country have declined for three sequential quarters this year — an unprecedented trend.

While the demand for 5G phones is a positive sign, experts say that it is too early to count this period as a sign of the market recovering.

“It is difficult to expect the market to ship over 50 million units every festive quarter. Upon preliminary estimates, we expect shipments during this period to remain flat — or witness very marginal growth at best — over 2021’s festive period," said Navkendar Singh, associate vice-president at market researcher International Data Corporation (IDC) India.

Singh added that the rise in 5G phone sales is a natural way forward, given that telcos are expected to roll out the first phase of consumer 5G services next month. This, in turn, could see phone makers gain some respite thanks to higher revenues — even as the consumer demand remains tepid at best.

Catch all the Technology News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less

Recommended For You

Trending Stocks

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout