Growing Smartphone production in India Pre-COVID-19 crisis:
India has emerged as one of the global front runners in the manufacturing of smartphones since 2016. The manufacturing of smartphones in India has seen an increase by 7% from 2016 to 2019. The major reasons for this rapid growth are i) provision of getting production-linked incentive (PLI) from government of India for boosting the domestic production of smartphone and their components, ii) US-China trade war is considered to another vital factor for companies shifting their manufacturing base away from China iii) Cheap availability of land and labor in India and iv) the gigantic domestic market as well as the options to curtail substantial import duties.
Additionally, firms like Apple, who were firmly against the setting up of their smartphone manufacturing units in India due to infrastructural inadequacies, lack of manufacturing ecosystem and interlinked supply chains, has agreed to do so. Its accord manufacturer (which are already present in India), Foxconn, has initiated the manufacturing of iPhone XR in Chennai and intends the production of the complete iPhone11 series from India.
Impact of COVID-19 on India’s Smartphone Production:
As a consequence of COVID-19 outbreak the Indian smartphone manufacturing industry may encounter a serious setback in domestic production and sale of smartphones by double digit percentages, due to its influence on both supply and demand. As a consequence of lockdown in China majority of the smartphone manufacturers have reported the lack in supply of the essential components from China in the first week of March. Amidst all these prospects as an impact of unstable economy, the demand of smartphones in India will significantly reduce thereby effecting overall production by the domestic as well as global smartphone producers.
The smartphone manufacturers are compelled to close down their production units as a consequence of the country wide lockdown starting from 25th March and further extended till 3rd May 2020. The initial lockdown from the government of India is considered to cause a monetary loss of more than $2 billion to the smartphone manufacturers. The extension of countrywide lock down will make the losses even enormous. Smartphone manufacturers have requested government of India to permit them to operate in the category of essential service, so to enable them to distribute smartphones during the lockdown. Xiaomi described that the request was not intended to create earnings, but about placing a crucial device in the reach of the people during the pandemic. Additionally, the COVID-19 outbreak has now been under control in China, providing stability to economy. As a consequence the smartphone manufacturing units are increasing production vigorously. On the other hand India is going through its extended manufacturing shutdown, which is expected to cause exponential losses to the smartphone industry in India.
Opportunities post-COVID-19 crisis:
Due to the COVID-19 crisis people around the globe are compelled to stay at home for several weeks or even months. The lock down will cause some persistent alterations (habituation to digital platforms) in the day to day life of people around the globe, leading to potential increase in the use of smartphones and the associated services. With work from home developing into a norm, and the halting of offline retail, the smartphone industry is expected to get significant number of new users, thereby increasing the demand for its quick production. Additionally, as a significant consequence of country wide lockdown, digital payment platforms have emerged as a necessity for common man. With the habituation of digital payment platform, smartphones are expected to ease endorsement of digital payments, thereby increasing the demands for smartphones.
Both the environmental and human nature is undergoing fast metamorphosis in these days of lockdown and Covid-19 crisis. Few bad habits will surely make way for a few new ones to replace in our day to day lives. Quintessential hand held remotely operated SMARTPHONES will remain and possibly gain bigger roles in our livelihood gathering more new customer bases not only just in India but also across the globe.
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