Festive season brought cheer to mobilephone sellers after weak first half as smartphones sales jump by 40%

As compared to last year, the sales of smartphones increased, by both value and volume, this festive season. The sales went up on huge demand for smartphones in Rs 20,000-category. The smartphone sales increased by minimum 40%.

The upbeat sales has set a trend for the quarter ending December, which typically makes up for nearly a fourth to a fifth of annual revenue for the industry. This is a relief after a tepid first half this year.

“Compared to last year's Diwali, we saw an increase of 40 per cent in actual sales by volume, as per consumer activations, for Micromax smartphones, and if we include Yu, sales were up 60 per cent,” Micromax Informatics chief marketing officer Subhajit Sen told ET.

People with knowledge in this sector said that Samsung’s mobile phone sales saw an increment of about 40%by value and consumer electronic’s sales had a risen sale of about 30%. Intex and Karbonn also had an higher sales by 14 per cent and 20 per cent, respectively, while players such as Panasonic, Xiaomi and LeEco, which have comparatively smaller bases, saw their sales more than double this Diwali against last year.

The rise seen in sales during this season is said to be because of pent-up consumer demand coupled with a number of model launches by top tier as well as new entrant Chinese brands. Enabling 4G phones to allow Voice over LTE (VoLTE) and higher purchasing power due to good monsoon this year, acted as key catalysts.

"This resulted in a 125 per cent growth in smartphone sales during Diwali compared to FY15-16,” Ravinder Zutshi, chairman of the mobile and communications council at CEAMA, the consumer electronics manufacturing association, told ET.

There was an increase seen in the sales of phones in the range the Rs 8,000-20,000 and increased number of people entered the Rs 10,000-12,000,Rs 17,000-18,000 and the Rs 15,000 price points.

"So, consumers in the sub-Rs 10,000 price segments ended up spending more and moving to one of these price bands, thus expanding share of the mid-segment. This was not the case last year,” a chief executive at one of the leading retail chains in India told ET.

The strong demand during the festive season this year brings some relief to an industry which has seen smartphone sales losing pace in the first half of the year as fewer consumers switched from featurephones to smartphones, forcing analysts to lower their smartphone sales expectations in 2016 by as much as 17 per cent.