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Smartphones sales drop 30-40% in July due to supply chain constraints

The cargos coming in through ports and airports are being 100% manually checked, which has led to a 10-day delay in supply am
The cargos coming in through ports and airports are being 100% manually checked, which has led to a 10-day delay in supply amid the India-China tensions.

Smartphone sales have dropped down 30-40% WoW in sales in July due to the shortage of smartphones inflicted because of import hurdles and production delays.

International Data Corporation (IDC) (1) and smartphone market trackers Counterpoint Research stated that all the smartphone channels, offline and online, are running short of stocks for most of the brands. The rollover impact of custom clearance delays that started in June would continue to impact sales in July.

Neil Shah, Research Director at Counterpoint, said that the crests and troughs in the demand & supply equation would be witnessed for the entire month of July. It takes three-to-four weeks n an average for parts to be shipped, assembled, and distributed. Moreover, regional lockdowns have delayed the process even further.

A leading agency also revised its April-June shipment estimates falling from 16 million units, as predicted earlier.

The tensions between India-China led to a 10-day backlog in supplies of phones & parts as the government initiated 100% manual checking of Chineses cargo at ports and airports between 22-30th June.

No regular supply since COVID

Upasna Joshi, Associate Research Manager at International Data Corporation, said, “Supply constraints continue to prevail with components stuck at the ports, especially for China-based vendors, and factories still running at less than half the capacity. The situation will take longer to improve than expected earlier, with supply bottlenecks clubbed with anti-Chinese sentiments.”

People claimed that the availability of smartphones in northern India was much better as the smartphone factories are located in the northern regions, which makes transportation much easier.

Sangeetha Mobiles, South India’s largest multi-brand mobile phone retailer, said it had witnessed a 90% recovery in the business in May-June compared to pre-COVID numbers. They stated that their July sales fell to 40%.

Chandu Reddy, Director at Sangeetha Mobiles, stated that the last two months pent up demand was high, which has now started to taper off. He also mentioned that the supply has never been regular since the COVID situation took place and that most of the brands have promised to send in fresh stocks in a week or so.