Demonetisation is delaying new smartphone launches. Here’s how

The demonetisation of currency has made the entire nation undergo a cash crunch and this has affected the market in a very bad way. Along with many markets, smartphone market is also facing the problems regarding sales. Inventories are piled up with devices and people don’t have enough new banknotes for purchase and this may force the mobile handset makers to alter production schedules and defer new launches.

According to reports, the situation has turned worse since the demonetisation announcement on November 8 and it may also affect shipment numbers for mobile makers in October-December quarter.

"Dealers have been sitting idle, some shops are also closed, because consumers are not coming to buy phones and sellers are not accepting old currency notes.There's an inventory pile-up happening and this dry spell will continue till November 25, till the time cash is easily accessible to consumers," Ravinder Zutshi, mobile council head at Consumer Electronics and Appliances Manufacturers Association (CEAMA) told ET.

According to a report by ET, smartphone sales are down by about 70-80% from pre-demonetisation days and this have led to a serious pile up in inventories as smartphones are generally bought with cash.

"There are no customers. Our existing stock isn't selling, so where is the question of ordering more stock," Rajesh Chauhan, owner of a small brick-and mortar shop, told ET.

Consumers have put large appliances and smaller electronic items such as phones lower down on their priority lists after the government banned use of Rs 500 and Rs 1,000 currency notes from last Wednesday.

Handset makers such as Micromax, Lava and Gionee, television and white goods makers are all watching the situation closely , amid the inventory pile-up, but are yet to take a call on modifying their production schedules.

The inventory pile-up for TV and white goods industry is still insignificant as of now since the industry anyway adjusts its production after Diwali when sales as a routine take a dip, added industry insiders.
(image: IndiaTimes)