Smartphone sales tepid

Smartphone sales failed to hit expectations in the first nine months of the year, because of a rise in import duty, recurrent floods and heavy rains.

In the period, 64.55 lakh units of smartphones were imported -- almost equivalent to that in the same period last year, according to Bangladesh Mobile Phone Importers Association (BMPIA).

A total of 82 lakh units were imported in 2016, up 45.72 percent from the previous year, thanks to the fast expansion of 3G services across the country.

In the last two years, importers had received very good response from the market and saw huge growth but this year the sector may lose momentum, industry insiders said.

“The natural disasters affected our business as sales of smartphones in rural areas have dropped drastically,” said Jakaria Shahid, managing director of Edison Group, the parent company of mobile handset brand Symphony.

“The rural area is a big market for us. At the same time, the business in cities has also been affected.”

The market has been going through a bad patch for the last two months as many customers in the flood-hit areas have put on hold the purchase of mobile phones, said Shahid, who is also the general secretary of the BMPIA. The increase in customs duty on handset imports in the current budget might have acted as a disincentive, he said.

Symphony marketed 20 lakh units of smartphones from January to September, which gave it a market share of more than 30 percent, according to the association.

In June, the government raised customs duty by 5 percentage points to around 31 percent on handset imports to give a boost to local manufacturing.

Some local firms have also taken initiatives to set up handsets assembly plants in Bangladesh, but it will take time to reap benefits from the move, said a senior executive of a reputed handset company.

Ruhul Alam Al Mahbub Manik, president of BMPIA, said the customers' experience of 3G services is not satisfactory also, which has hampered the overall business as well.

Manik, also the distributor of Samsung handsets in Bangladesh, said sales normally remain dull in the last quarter of a year and the same may happen this year.

Samsung imported 10 lakh pieces of smartphones in the nine months to September with a market share of more than 15 percent.

In the period, the industry imported a total of 2.74 crore handsets while the full-year's import figure touched 3.10 crore in 2016.

But this year's combined imports may not surpass that of 2016, industry people said.  

“The device industry witnessed growth in the last few years, especially in the smartphone segment, but it has not been satisfactory so far this year,” said Rezwanul Hoque, a former general secretary of the BMPIA.

Hoque said the customers' wait for the launch of 4G might have slowed smartphone sales.

The government plans to roll out 4G by December this year but the sector leaders think the launch may take place in the first quarter of next year.  Walton, Symphony and Samsung have dominated the market in the last few years.

In the nine months to September, Chinese brand Huawei has strengthened its position in Bangladesh in 2017 and imported 6.34 lakh smartphones while Walton imported 5.57 lakh units. Two other Chinese brands Lava and Oppo also got positive response from the market and imported 5.40 lakh and 3.28 lakh units respectively.

Bangladesh's mobile phone industry has received a boost in the last three years, largely because of the rollout of 3G services in 2013.

In 2012, only 3 percent of the total mobile imports were smartphone, but it climbed to 7.88 percent in 2013, 19.7 percent in 2014, 21 percent in 2015 and 26.45 percent last year, according to the BMPIA.

The sector imported 56.27 lakh units of smartphone in 2015 and 40.64 lakh in 2014.