## Smartphone Sales Decline in India, Despite Increased Shipments
The Indian smartphone market experienced a challenging first quarter of 2024, with retail sales falling 3-4% compared to the same period last year, according to Counterpoint Research. This decline is attributed to several factors, including a slow demand period, an extended replacement cycle, and the presence of many 2G subscribers opting for refurbished phones instead of upgrading to new 4G models.
Despite the decline in sales, overall shipments to warehouses and sellers grew by 10-12% year-on-year. This indicates that the launch of many new models in Q1 of CY24 has contributed to increased inventory, even though consumer demand remains sluggish.
Analysts point to the festive season and government policies as key factors driving sales in the past. However, the absence of such stimuli in early 2024 has contributed to the slow demand. Additionally, the decline in 2G subscribers has slowed down, impacting the expected upgrade to 4G phones.
Companies remain optimistic about Q2 of FY25, anticipating that the new models launched in Q1 will eventually translate into increased sales. They believe that the second quarter will see a positive impact and outperform the previous year.
The slowdown in the smartphone market presents a challenge for manufacturers. They must find ways to encourage consumers to upgrade to 4G phones, particularly in rural areas where 2G subscribers remain prevalent. Additionally, they need to offer compelling features and value propositions to compete with the growing market for refurbished phones.