Good demand, but smartphone companies are unable to cater to it---we tell you why

While the smartphone industry was attempting to regain the ground lost due to the pandemic outbreak, issues like production delays and supply chain disruptions have resulted in a 30-40% dip in the smartphone sales despite strong demand.

Both IDC and Counterpoint Research find that the impact of custom clearance delays that started in June, due to the Ladakh border issues, is still hampering the supplies in July, reports ET.

Both the agencies have reported that devices from almost all the companies are out of stock on both online and offline stores.

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Missed opportunity

Ever since the Indo-China border tensions hit a peak, technology companies are facing the heat. Indian Government’s decision to manually check all the incoming Chinese cargo has caused a delay in the supply of phones and components by 10 days.

A device takes over three to four weeks to go through the cycle that starts with the shipment from China and ends up with a distributor while passing through the assembly line, “the delay at customs will result in short supplies for the entire month of July,” Neil Shah from Counterpoint Research states.

Additionally, due to the regional lockdown and factories operating at partial capacity due to social distancing norms, “the situation will take longer to improve than expected earlier, with supply bottlenecks clubbed with anti-Chinese sentiments,” says IDC’s Upasana Joshi.

Due to short supply, several retailers have reported a huge slump in their numbers. A leading retailer from the southern part of India, Sangeetha Mobiles, that was able to clock 90% of pre-Covid sales, reported a dip of 40% in July. Online retailer, OlineO has reported that it was only able to fulfil 50 orders a day compared to 300 orders that it could serve in June when supplies were proper.

While the industry saw a huge uptick in the demand ever since the relaxations in lockdown mainly attributed to remote working and remote educational needs in new normal, the pent-up demand will eventually fade. However, retailers who’re still under a lot of financial pressure due to the lockdown, can do nothing but rue this missed opportunity.