The Strategist

Quarterly smartphone production to fall by half due to coronavirus

02/11/2020 - 07:53

Smartphone sales in China could fall by 50% in the first quarter due to the fact that many retail stores have been closed for a long period, and production has not yet fully resumed due to the rapidly spreading coronavirus, reports Reuters.

Canalys researchers report that supplier-planned new product launches will be canceled or delayed. In particular, the epidemic could disrupt China’s plans to deploy fifth-generation network infrastructure. It is 5G that experts call the driving force that can return the smartphone market to growth.

Canalys expects Chinese smartphone shipments to halve in the first quarter compared to the first quarter of last year, while IDC researchers predict a 30% drop.

TrendForce also worsened its forecast for smartphone production for the first quarter of 2020. Analysts believe that 275 million smartphones will be produced in the world in January-March, which is 12% compared with 2018.

Experts believe that the South Korean Samsung, most of which is concentrated in Vietnam, will be the least affected by the coronavirus epidemic. However, Samsung buys a number of components in China, so analysts have lowered their forecast for it.

Earlier, Apple reported that its stores in China will be closed so far, and Foxconn, which collects iPhones at its factories, cannot fully restore work. TrendForce expects quarterly shipments of Apple smartphones within 41 million units, which is about 10% lower than the initial estimate of 45.5 million devices.

Last week, Apple Inc. announced extension of the closure of retail stores in China, while Foxconn, which assembles the iPhone, has not yet been able to fully restore the work of its factories.

Huawei said its production facilities are operating normally. TrendForce has revised downward the assessment of the production of Huawei smartphones. Forecasts for Oppo and Vivo have been reduced by 14% and 15%, respectively, to 2.45 and 1.7 million units.