12 Dec 2016


Smartphone Industry And Demonetization

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Source: Apsalar

It was just over a month ago the Prime Minister of India announced the ban on 500 and 1000 rupee notes with immediate effect. This step to curb black money in India without any prior hint have affected so many fields in the country in each and every industry. The lower class and the middle class people have also been put into very difficult situations by this step. But how has it affected the smartphone industry. Let's see.

The Negative Side

The most affected segments in the smartphone industry are the featured phones and the budget smartphones. This is mostly because the below average costs of these phones are being paid directly by cash and not by any online transactions. Reports says that in the first few days after PM's announcement, there had been a 90% decline in the sales of these phones. But according to Intex technologies, the 90% decline has reduced to 50-60% and have stabilized there because of the fact that people have started adopting online platforms like FreeCharge, Paytm etc for getting their transactions done. But still some retailers haven't settled for these online modes because of the time taken to liquidate the money once the transaction is made.

To know more about Paytm: Paytm, All you need to know

This trend has led to the problem of decreasing in the shipments of smartphone in and out of the country. Reports says that there had been a decline by 17.5%, and feature phone shipments are likely to decline by 24.6% in Q4 2016. This is mainly because these kind of phones are mainly bought by the lower class people who doesn't have knowledge of online payments. These are the people who will not even be having a bank account to make transactions and will be working for daily wages. That is mainly why the feature phones have been affected very much.

The Positive Side

The Premium phones segment have faced a positive increase in the sales since demonetization. This is mainly because the buyers have been going around looking for phones to buy using the demonetized currency. Since buying budget phones won't give them much relief, they have been going for premium phones. Statistics says that 1 lakh iPhones have been sold out during the first three days of demonetization. This is almost 75% of their average monthly sales across the country. On November 8th when this was announced, some stores were selling premium phones at high prices till late night.

Anyways, undoubtedly, there had been a dip in the smartphone industry which is trying to come back to the normal level. This can only be reached once there is a stabilized economical status in the country, unlike the present situation. Due to this crisis, people have also started using online platforms very widely which is a way to strengthen the cashless economy in India. In a way this is also going to be a boost to the smartphone industry since there is a need for smartphones and good data connectivity for any transactions. 


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3 February 2017 at 11:23 delete

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