Following the decline of 25 per cent in sales on a year-on-year basis, the production is likely to reduce by about 20 per cent than the planned levels.
As the stock of unsold goods rises across product categories, major producers of smartphones and television are preparing to cut down the production ahead of the festive season. Following the decline of 25 per cent in sales on a year-on-year basis, the production is likely to reduce by about 20 per cent than the planned levels.
Moreover, surging memory costs have added about 35 to 40 percent in smartphone prices and about 20 to 25 per cent in TV prices, denting the demand in entry-level and mid-range segments. “Smartphone production is going to come down by 20%,” said Pradeep Jain, managing director at Jaina Group, a contract manufacturer.
The festive season setback follows a 10 per cent Y-o-Y decline in sales of smartphones and TV units in July-September Quarter. Prices of PCBs used in 32-43 inch TV units have doubled to $80 this year, with vendors projecting a surge to $110 in January to February.
“Even though most companies had built festive inventory conservatively, no one expected festive sales for memory products such as televisions to be impacted so badly,” said Haier India chief executive Satish NS.
