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Handset, TV makers set to slash production on festive sales shock

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Handset, TV makers set to slash production on festive sales shock

Plan output reductions of up to 20 per cent as higher prices hit demand and unsold stock piles up

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Smartphone and TV makers slashing production by up to 20 per cent.

Smartphone and television makers are scaling back production after a festive sales slump has left sellers stuck with excess unsold stock, extending the pain of a weak year into the industry’s biggest selling season.

Production is likely to be up to 20 per cent below planned levels over the next two-three months, following a decline of about 25 per cent year-on-year so far in sales volume in this festive season, according to leading brands and contract manufacturers.

Surging memory chip costs have pushed up smartphone prices by 35-40 per cent and television prices by 20-25 per cent on average, severely denting demand in the entry-to-mid-range segment, which accounts for the lion’s share of the market.

Industry executives said memory prices have increased two to three times in the past 10 months as demand, led by the AI sector, outstrips supply.

“Smartphone production is going to come down by 20 per cent,” said Pradeep Jain, managing director at Jaina Group, a contract manufacturer. He expects some recovery next year as consumers eventually replace their devices despite higher prices.

The festive season setback follows a decline of more than 10 per cent year-on-year in smartphone and television unit sales in January-September, executives said.


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