Are Smartphones An Essential Item Whose Sales in India Be Resumed Amid COVID-19 Lockdown?

The lockdown forced phone makers to put their launch plans in India to rest for some time.

Are Smartphones An Essential Item Whose Sales in India Be Resumed Amid COVID-19 Lockdown?

Individuals in India aren’t able to get mobile phones due to the nationwide lockdown

  • Mobile phone companies aren’t able to service faulty devices
  • Industry bodies such as ICEA and MAIT are looking for some relaxation
  • However, experts believe people won’t buy even if they would be allowed

India is about to complete a fortnight after Prime Minister Narendra Modi imposed the nationwide lockdown due to the coronavirus outbreak on March 24. The lockdown that was aimed to reduce the deadly impact of COVID-19, caused by the coronavirus version called SARS-CoV-2, has adversely impacted the lives of most Indians. Several people are also struggling in getting even groceries and necessity items such as milk at their doorstep. It's becoming increasingly clear that we're all going to have to turn to our phones for most needs in life — whether it's getting food and medicines delivered home, schools and colleges taking their classes to Zoom, or watching movies and shows to pass the time.

But while people — and businesses — are quickly adapting to a digital world, this is proving to be a big problem for those of us who weren't already prepared with devices and connections. Getting a new Internet connection is a challenging prospect right now, and mobile connections are the only way for many people to stay online — but what happens if your phone stops working, or if you were one of the many Indians who was still sticking to a feature phone? That's the argument that a number of smartphone makers are bringing forward to try and bring the sale of their devices back on track. Yet, if industry insiders support this view, people who used to work in this space but have moved on to other businesses said that now is the time to wait, rather than rush into opening up sales in a hurry.

The lockdown forced phone makers including Realme, Vivo, and Xiaomi to delay new launches in India due to the ongoing restrictions that are in place at least until April 14. In fact, far from launching new devices, the companies in India aren't able to sell the units that are already in the country — through offline retailers or any e-commerce source. This means that if your phone stops working, you could be in for a very tough time indeed.

Staying home requires staying connected
Due to the lockdown, the government initially had to close all the schools and other educational institutions. Some schools, however, opted for the tele-education way and started teaching their students online. Educational boards including the Central Board of Secondary Education (CBSE) and Council for the Indian School Certificate Examination (CISCE) also kicked off virtual classes.

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However, according to a report by community social media platform LocalCircles, two out of five parents in India don't have the adequate hardware needed for their children to help them participate in virtual classrooms. The platform particularly conducted a survey of over 23,000 respondents residing in 203 districts across the country through which it found 43 percent of parents without the requisite hardware.

Just like remote classes, mobile phones have become vital to order items such as groceries in this lockdown period. Online grocery selling platforms such as BigBasket and Grofers recently revealed that since many people aren't going out of their homes to buy daily essentials due to the fear of getting infected, they've seen a sudden surge in demand. A large number of customers buying groceries online are already making their purchases through smartphones — using the mobile apps of key ordering platforms.

With smartphones not being seen as essential goods, this means that those people who don't already have one, can't get one. Aside from the sales, people who already have a mobile phone or a computing device aren't able to get them serviced thanks to the lockdown.

Industry bodies raise demand for essential tag
Many companies have already started demanding the government to allow them to resume the servicing and sales of their existing mobile phone models in the country. In a letter dated March 29, the India Cellular & Electronics Association (ICEA) requested the Prime Minister to start considering the “service, maintenance, and delivery” of mobile phones and Information and communications technology (ICT) products as an essential service.

The letter, a copy of which is with Gadgets 360, emphasised that smartphones, tablets, and other computing devices are “mission critical” to the functioning of crucial bodies such as government officials, hospitals, and the police in addition to the telecom and Internet services that are already included in the list of essential services by the Ministry of Home Affairs.

The ICEA Chairman Pankaj Mohindroo told Gadgets 360 that the industry body received over 50,000 requests pertaining to servicing and sales of mobile phones since the impose of the lockdown.

“These are just the requests we received,” he said over a phone call. “There will be millions of requests because there are about 850 million active phones.”

While the ICEA doesn't want the government to enable the sales of mobile phones and other computing devices through offline retail stores, it did ask the Prime Minister to consider their sales as an “essential service” via e-commerce channels.

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Similar to the ICEA, the Manufacturers' Association for Information Technology (MAIT) also on March 27 wrote a letter to the government seeking mainly the resumption of communication device sales and services in the country. The apex body of ICT companies, however, doesn't want the operations to be resumed for end consumers and just demanded them to be restarted for organisations and people such as healthcare workers, said George Paul, Chief Executive Officer, MAIT.

“At this stage, I think it would be irresponsible of anybody to say that we want retail consumption of these products to be opened up,” Paul told Gadgets 360 in a telephonic conversation.

Are the logistics in place?
Both the trade bodies say that the logistics for delivering their member's products through e-commerce are already in place.

“Now, there is no shortage of logistics infrastructure, per se,” said Paul. “There is sufficient of that in the country. But what we see happening in the country is controlled logistics so that we are able to control the pandemic.” Mohindroo of ICEA also echoed this sentiment, and added that more production in India was also required. “When you consider something under essential services, then you start producing it also,” he told Gadgets 360.

However, when asked about how would the companies ensure healthcare of their factory workers, he asserted that manufacturing of mobile devices was already a sanitised and a very regimented operation. “All precautions are taken, social distancing is done, fumigation is done, because that is a part of manufacturing. You have to have a very, very clean environment to produce phones because they're very sensitive to dust,” he continued. However, neither had a clear answer to give about whether or not the timely delivery of phones would be possible anytime soon, even as we struggle to get daily necessities, like groceries to households.

Companies like Honor India, Realme, Oppo, Xiaomi, and others told Gadgets 360 that they have written to the government to ask for the online sales of smartphones as well, calling them “essential” for in the current scenario, as tools that can enable social distancing. Infinix India CEO Anish Kapoor told Gadgets 360 that apart from smartphones, other electronic products such as batteries and chargers should also be marked as essential, as they're required to keep the phones running.

Ajey Mehta, Vice President, HMD Global — which is behind the current Nokia smartphones — told Gadgets 360 that the government could also allow service centres to be opened, so that broken devices might get repaired and those centres could also allow sales to some extent, especially in rural markets where e-commerce is not as popular. He also said that the government could look at restarting limited manufacturing of mobile phones to about 30 to 40 percent and ramp up to 100 percent over time.

“With the smartphone screen being the primary screen for the millions of Indians, clearly, mobile phones have become extremely important,” Mehta told Gadgets 360.

Prabhu Ram, Head – Industry Intelligence Group, CyberMedia Research, said that a smartphone nowadays is a central to human lives and is, therefore, important not only from the communication side but also to help individuals seeking information and connect with healthcare and education.

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In fact, the companies and analysts that spoke to Gadgets 360 also pointed out how smartphones are an essential part of the government's response to the current crisis. They noted that the government would not be able to track the spread of COVID-19 through apps such as Aarogya Setu, launched by the government last week.

A fall in demand is likely to continue
But while these are valid points, enabling the sales of smartphones is unlikely to solve the other problems. If 43 percent of parents don't have access to a smartphone today, it's likely related to budgetary constraints — and that is not going to become any simpler in the current scenario. In fact, far fewer people will have the discretionary budget to buy a smartphone at a time when many jobs are not possible. And opening up service centres seems to run contrary to the whole idea of social distancing, and reducing the spread of coronavirus.

“As somebody who has spent enough time in the industry but not currently related, I personally believe this is the time when it's very important to have minimal activities,” said Sudhin Mathur, former Country Head Lenovo Mobile Business Group India, over a phone call with Gadgets 360. He also noted that since the lockdown would just be in place for a few days, things would ease out soon. “Restrictions or limitations to the essential services which are more important for daily living should be probably given more priority than anything else. Because everything is related,” he added.

Ajay Sharma, former Country Head of HTC India, pointed out that opening up of mobile phone sales in India would be opening up Pandora's box as people would then demand to enable sales of other goods as well. He also underlined that even if the companies would be allowed to resume their operations, there won't be much demand for buying new phones. “I think it's something which can be postponed and people will postpone,” he said. “No feature phone customer is going to shift to smartphones at this time, for sure. And when you talk about smartphone people upgrading, I think at this time, they would prefer to hold on to what they have rather than spend money to buy new phones.”

Mathur also said that there would be a fall in the demand for mobile phones due to the ongoing economic loss and psychological trauma that people have got due to the pandemic. “There would certainly be a sentimental impact because once it will all open up, people will definitely prioritise their essential things and goods, but the mobile phone industry may not be impacted as much as some other industries, let's say an airline or the hospitality industry, as an example,” he told Gadgets 360.

Manu Seth, former Senior Director, Head of Marketing, HTC South Asia, said he favours the sales of phones as an essential service. However, he said that there would be a shift in consumer behaviour and changes would be noticed in buying patterns. “The adverse effect of the current situation is going to be long on the economy, it is going to take a long toll,” he said.

Market research firms have already forecast difficulties for smartphone companies in India. A recent report by CyberMedia Research (CMR) suggested that the smartphone production is likely to tumble by 38 to 40 percent in the first half of this year, while a significant drop of 20 percent year-over-year is estimated in smartphone shipments in the first quarter.

Counterpoint Research Associate Director Tarun Pathak told Gadgets 360 that no matter whether the government would allow phone sales under the essential service category, original equipment manufacturers (OEMs) need to go back to the drawing board to re-strategise for 2020 and beyond.

OnePlus 8 leaks look exciting but when will the phones launch in India? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts or RSS, download the episode, or just hit the play button below.


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