Global smartphone market suffers worst contraction in history due to coronavirus

Smartphone shipments have fallen under 300 million since 2014 with a swift decline in demand


Reuters/Tech Desk May 02, 2020
PHOTO: REUTERS

Coronavirus has had a drastic impact on the smartphone industry as it faces the fastest ever first-quarter year-on-year decline, according to new data released by Counterpoint and Canalys, analyst firms.

There is an overall decrease in global shipments at 13 per cent, while Counterpoint suggests the drop in China alone was 27 per cent while Canalys estimates it at 18 per cent.

Shipments have fallen under 300 million since 2014 with a swift decline in smartphone demand in China and around the world.

“By the end of the quarter, as Covid-19 started to spread to other regions, and lockdowns of varying severity were imposed, the pendulum of disruption started to swing from supply to demand,” Counterpoint’s team of analysts writes in a statement.

“Demand for new devices has been crushed,” says Canalys senior analyst Ben Stanton.

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“In February, when the coronavirus was centered on China, vendors were mainly concerned about how to build enough smartphones to meet global demand. But in March, the situation flipped on its head. Smartphone manufacturing has now recovered, but as half the world entered a lockdown, sales plummeted.”

“From the consumer standpoint, unless replacing a broken phone, smartphones are mostly a discretionary purchase,” says Tarun Pathak, associate director, Counterpoint.

“Consumers, under these uncertain times, are likely to withhold making many significant discretionary purchases. This means the replacement cycles are likely to become longer.”

 

PHOTO: Counterpoint Research

Samsung and Apple still maintain their first and third spots on the leaderboard but are both expected to lose market share to Chinese rivals, according to TrendForce, a market research firm.

Xiaomi ranked fourth, accounting for 10 percent of the global market share for the first time.

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Apple has slashed prices of its iPhone 11 in China, the only major market where its stores are open. It also launched a $399 iPhone it hopes will find takers in a frugal economy.

Further, the estimates suggest that iPhone production fell nearly 9% to about 38 million units in the March quarter, and expects a further drop of 2 million units in the current one.

This article originally published on The Verge.

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