Smartphone vendors in the country are facing a ‘4G problem’. With 5G smartphone market share touching almost 50%, distribution and retail channels are reportedly struggling to clear inventory of 4G handsets. According to a report in the Economic Times, quoting market tracker, more than nine weeks of inventory is currently stuck in the channels.

The 4G inventory stock is reported to be currently higher than the average market inventory, which at this point of time is around 9-10 weeks. This is in sharp contrast to the demand for 5G smartphones, which is steadily rising with market share touching 50% in April. The decrease in average selling prices of 5G smartphones has helped up the demand. Buyers can now find quite a few 5G smartphone options under Rs 15,000. Analysts say that as 5G smartphones now fall below the Rs 15,000 price segment, the current 4G smartphones in the market are seeing few takers, especially those with low RAM and storage.

Price cut of 4G phones
The stock pile up has reportedly led smartphone brands to permanently slash prices of 4G handsets nearing their end-of-life cycle in a bid to clear out the inventory ahead of the crucial festive season starting from August. This means phone buyers who are fine buying a 4G handset may get a good deal on them.
Offline retailers told the publication that 4G smartphones now comprise around 45% of sales, from 80% till last year, with brands cutting down on launching 4G models, especially those priced above Rs 10,000. They added that customers too now walk in demanding 5G smartphones and they are able to meet their monthly sales targets easily and earn higher margins.

Some brands such as Xiaomi are reportedly “extending support of around Rs 20 crore to retailers to facilitate the sale of their unsold end-of-life models,” a member of All India Mobile Retailers Association said. This has resulted in price drops of Rs 2,000-3,000 of 4G phones aimed to clear out the inventory.