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Smartphone shipment in the country clocked 18 percent year-on-year growth in the March quarter, but the April-June quarter period is expected to face growth challenges under the weight of the second wave of infections, research firm IDC said on Tuesday.

Smartphone shipments grew 18 percent to 38 million units in the March 2021 quarter over the year-ago period, but declined by 14 percent from the December 2020 quarter.

While the vaccine roll-out programme at the beginning of the year instilled positive sentiments, the onset of the second wave of COVID-19 infections towards the end of the quarter resulted in subdued consumer demand, IDC said.

Thus, the inventory cycle — which had shrunk earlier in the second half of 2020 — started to get longer since the middle of the first quarter of 2021, it added.

“The April-June quarter is expected to face growth challenges under the weight of the second wave of infections. However, the high shipments from the first quarter should be able to suffice for the immediate demand,” IDC India Research Director, Client Devices, and IPDS Navkendar Singh said.

IDC estimates the impact to be less pronounced compared to the last year, with factories being operational now and only limited restrictions on logistics/transportation and state-level lockdowns instead of a nationwide lockdown, he added.

Singh said the recovery in 2021 might not be as smooth as expected earlier, with uncertainty around the lasting impact of the second wave and a possible third wave in the next few months.

“IDC expects a rebound in consumer sentiments in the second half of 2021, resulting in a single-digit growth annually. However, the degree of growth will be restricted due to reduced discretionary spending, supply constraints, and anticipated price hikes in components in upcoming quarters,” he added.

Xiaomi led the smartphone tally with 27.2 percent share, followed by Samsung (19 percent), Vivo (17.3 percent), Oppo (12.2 percent), and Realme (10.7 percent) in the March 2021 quarter.

Almost 7 percent of the overall shipments were 5G, leading to a 3 percent y-o-y increase in ASP to USD 176. Further, the premium segment (USD 500 and above) grew 143 percent y-o-y, with 71 percent of those based on 5G.

Apple, Samsung, and OnePlus continued to dominate in that space and the iPhone 11 and 12 together accounted for 28 percent of shipments, followed by Galaxy S21 series and OnePlus 9 series.

Separately, feature phone shipments declined by 8 percent year-over-year, despite Reliance Jio launching its new 4G device bundled with telco offers. However, the 2G segment witnessed 3 percent growth driven by iTel and Lava, IDC said.

“IDC expects a boost in 5G shipments with more affordable options, stickiness through financing/trade-in programmes, and steeper discounts/cashback offers,” IDC India Associate Research Manager, Client Devices Upasana Joshi said.

Additionally, vendors continue to focus on India as a manufacturing hub, which can be seen in their efforts in locally sourcing more components, ongoing investments in R&D capabilities, and adding new surface-mounting lines to cater to the growing local demand as well as for exports from India, she added.