The Indian market is not “fat” as imagined by phone companies, Apple “crying”

Apple is planning to expand in India in both sales and manufacturing, including 100 new franchised stores and tripling iPhone production over the next two years. However, the Indian market does not seem to be as attractive as it seems in terms of smartphone consumption due to inflationary reasons.

In this country, inflation is eating away at demand for smartphones more than ever. Low rates of steady employment and falling household incomes leave Indians with less money to spend, especially on tech items.

Demand for smartphones has plummeted in India as consumers are restraining spending amid dismal macroeconomic conditions.

According to a report published last month by market intelligence firm Counterpoint Research, rising inflation, shortages of electronic components amid limited supply due to the conflict in Ukraine and China’s zero-coivd policy China has influenced demand for smartphones worldwide.

Weak demand in the budget segment affected sales even as the premium segment continued to grow, the report said.

Another Counterpoint report said in November that consumer demand peaked in the last week of September – the time of festival discounts. Almost all brands are affected, especially in the budget segment.

According to Ami Shah, co-founder of IntelliAssist, a digital marketing company, Indians usually change their smartphones every few years. Over the past few years, this time period has increased dramatically.

By 2021, when the Covid-19 pandemic hit the economy hard and phone upgrades have really slowed down. Fewer jobs and inflation have taken smartphones away from the needs of users.

Inflation is a cause for concern in the Indian economy. The price of a budget smartphone has also increased from over Rs 10,000 per unit two years ago to more than Rs 16,323 (equivalent to $200) in 2022.

The majority of these low-end handsets used by low- and middle-income groups in India, are locally manufactured. Industry experts estimate there are around 450 million feature phone users (base phones cost less than Rs 1,500 each) in India.

The overall slowdown of the economy and high unemployment also reduce household incomes, leaving less money to spend on more expensive handsets.

According to FT, Bloomberg