Festive season Impact on upcoming smartphone launches? – A Smartphone shelf life perspective

  • Almost every smartphone vendor in India is ramping up and refreshing its product portfolio ahead of the upcoming festive season.
  • Apart from new launches, almost all top 10 India smartphone vendors are expected to launch their own promotional campaigns on different platforms soon which involves significant ad spend.
  • These aggressive marketing campaigns will spread across various promotional platforms highlighting new launches, discounts, freebies, data bundling, EMI, buybacks etc.
  • Not only offline distribution channel but online channel will see the influx of customers waiting in virtual queues to grab new offerings from vendors and thereby boosting overall sale of the smartphones in India.
  • To arrive at the festive season impact on smartphone launches, we analyzed 2000 smartphone models launched every quarter during last three years and noted their shelf life in terms of shipments.
  • As per chart below we can see that the smartphone launches during festive season reaches its peak during that quarter as compared to any other quarter of the year.
  • Number of Smartphone launches per quarter has increased from 38 in Q2 2012 to 190 in Q2 2015.


Smartphone launches by Quarter Q2’12-Q2’15 and their Shelf life

  • The most interesting trend is that smartphones launches during festive season have 20% longer shelf life and better recall due to promotions and incentives associated with the product during the launch.
  • 7 out of Top 10 best-selling models in last three years were launched during festive season alone with an average shelf life of 15 months.
  • Smartphones from Global brands had an average shelf life of 11 Months as compared to 6.5 months for Local brands in CY 2014
  • However due to Intense competition the average Industrywide smartphone shelf life has shown a decline of 30% from 257 days in Q2 2012 to 180 days in Q1 2015 (*Forecasted).
  • However post festive season result in inventory stock pile for many brands.
  • In last two years, with festive offers and discounts running around and validity of the same ranging between 3-4 weeks during festive season, vendors try to squeeze their Sell-in (Shipments) vs Sell-through (Actual sales) but not all succeed in the same and hence the drastic dip in sell-in (shipments) during following months of festive season.
  • Last year the decline was almost 30% comparing festive and post festive season month.
  • However, the online retailers should benefit in this lull period as they hardly carry excess inventory plus the price aggressiveness will woo consumers towards their stores.
  • Counterpoint Research estimates a sequential growth of 24% and 26% in India Overall and Smartphone market in Q3 2015 due to high sell-in in anticipation of festive season. However during Q4 2015, 17% and 58% Y-o-Y growth has been estimated.

To summarize I think this is the most competitive festive quarter in the past three years with close to 110 brands competing with each other but at the same time consumers too are going to have a hard time evaluating various options.

– Tarun Pathak

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