At a time when the global smartphone industry is facing component and chip shortages, the festive season in India is set to witness record smartphone sales at $7.6 billion (nearly Rs 56,880 crore), with the retail average selling price (ASP) growing by 14% to reach its highest ever at $230 (a little over Rs 17,000), a new report showed on Thursday, October 21.

According to Counterpoint Research, the festive season is seeing higher trade-ins and aggressive EMIs that increase device affordability and help consumers bypass multiple price barriers. This has helped drive the sales of mid-to-high tier (more than $200) smartphone models and, subsequently, the overall ASP.

"We estimate that almost $7.6 billion worth of smartphones will be sold during the ongoing festive season. This highest-ever number is coming at a time when the global smartphone industry is facing component shortages. As a result, OEMs have been forced to increase prices, which will have a higher impact on the mass market and budget segments," said senior analyst Prachir Singh.

High consumer demand in the mid and premium segments will drive sales, the report said.

Although the growth in market value during the 2021 festive season is expected to be 1% (year-on-year), the retail ASP will grow at 14% (YoY).

"The overall consumer sentiment has been positive going into the festive season. Many consumers have decided to spend from their accumulated savings for something that is more personal. This trend will drive a faster smartphone upgrade during the festive season," said Research Director Tarun Pathak.

India's festive shopping season was kicked off during the first week of October when online platform giants Amazon and Flipkart announced their sales. The season will end on November 4 with Diwali.

"Many OEMs sensed this trend (trade-ins and EMIs) and brought out aggressive offers on premium devices. The relatively higher sales of premium segment smartphones also helped offset the losses in the mass market due to price hike," Pathak added.