Handset business fading on spike in memory prices; smartphone market could shrink more than 13% this year

Rising input costs for memory chips are directly impacting the profitability and sales volume of consumer electronics, particularly smartphones. This trend is likely to put pressure on companies involved in manufacturing and retailing these devices in India.

• •Smartphone market could shrink more than 13% this year.
• •Sales slumped 35% in February due to spike in memory prices.
• •March is traditionally a weak month for sales, and the situation is expected to remain the same or worsen.
• •Customers have less disposable money after making income tax and other fiscal-year-end payments.
• •Risk flag: Potential for memory prices to stabilize or decline faster than expected.