Market research firm TrendForce stated that the global smartphone market forecast for 2021 had been lowered to 8.5 percent from 9.4 percent due to the increasing severity of the Covid-19 epidemic in India.
The epidemic has affected the production and sales of major cell phone brands. The total number of units produced is about 1.36 billion, with further revisions below 8 percent not ruled out.
India is currently the world's number two smartphone market. TrendForce reports that the world's top five cell phone brands - Samsung, Apple, Xiaomi, OPPO, and Vivo - all have production lines in India or through OEM (original equipment manufacturer) factories, and the proportion is increasing year by year. However, the current output is still mainly to supply local demand. Based on the current local production situation, it is tentatively estimated that 12 million units of production will be affected from the second quarter to the third quarter, and the total annual production in India will probably decline by 7.5%.
According to the report, local information points out that the second wave of the epidemic mainly hit the middle and high affluent class, which will directly impact the consumption performance in the second quarter and further lead to a decline in the average selling price (ASP). Therefore, cell phone brand manufacturers will inevitably adjust the annual production plan depending on the finished product inventory situation.
In addition, the report pointed out that the top four cell phone brands in India are: Xiaomi (25%), OPPO (23%), Samsung (22%), Vivo (16%), the four together accounted for 86%, covering the market mainstream consumption of products in the range of 100-250 U.S. dollars, so the expansion of the epidemic on all major brands have an impact.
From the perspective of productivity, most factories are not affected by the epidemic and still maintain normal operations. Still, TrendForce believes that if the situation is not alleviated, the business will be halted and even affect the transportation of components.
Overall, the report believes that if the epidemic in India is not properly controlled in the second quarter, it will be difficult to be optimistic about the second half of 2021. The annual cell phone production volume may face downward revision again. Based on this assumption, TrendForce proposes a bear case scenario, which does not rule out the possibility that the growth of total smartphone production this year will be revised down to less than 8% again.
Sources: https://www.trendforce.com/presscenter/news/20210510-10774.html
