Global smartphone shipments fell by 11.7% in the first quarter of 2020. This is the effect of the coronavirus pandemic, which slowed down demand.
The number of global smartphone shipments was down in the first three months of the year. The industry suffered its biggest annual decline. This happened due to uncertainties and insufficient consumer interest amidst coronavirus outbreak.
Research firm International Data Corporation (IDC) reported that smartphone manufacturers delivered 275.8 million devices from January to March. This is an 11.7% decline from a year earlier.
Meanwhile, China suffered a drop of 20.3% on-year. According to IDC, the country accounts for almost a quarter of worldwide shipments. There was almost no movement in China in February because of the country’s efforts to curb the outbreak.
IDC also cited global dependency on China for its smartphone parts and assembly lines as another factor of the decline. Shipments in the US and Western Europe fell by 16.1% and 18.3%, respectively.
“What started as primarily a supply-side problem initially limited to China has grown into a global economic crisis with the demand-side impact starting to show by the end of the quarter,” said Nabila Popal, research director with IDC’s Worldwide Mobile Device Trackers.
Economic forecast for China
Research firm Canalys reported that shipments in China plunged 18% on-year to about 73 million devices. However, major smartphone makers remained “resilient.”
Market leader Huawei announced a 1% growth in its shipments for the quarter. Meanwhile, the likes of Oppo, Vivo, Xiaomi and Apple struggled with declines in one of the world’s largest smartphone markets.
“The smartphone’s status as an ‘essential’ personal item has stopped the market falling further during the pandemic,” Nicole Peng, vice president of mobility at Canalys, said in a statement.
Canalys said that the first-quarter performance was “buoyed by China’s well-established ecommerce channel for smartphone distribution, and the fact that most Chinese businesses were able to resume work rapidly after two weeks of nationwide travel restrictions."
Moreover, Peng pointed out that Canalys remains wary about the recovery period in China’s smartphone market in 2020. She noted that rising unemployment in the retail, manufacturing, travel, and tourism industries can affect domestic consumer confidence.
A sharp decline in company revenue and profits also had an impact on spending power.
A discretionary purchase
According to Counterpoint Research, global smartphone shipments dropped around 13% from a year ago in the first quarter of 2020.
“From the consumer standpoint, unless replacing a broken phone, smartphones are mostly a discretionary purchase,” Tarun Pathak, associate director at Counterpoint Research, said in a statement.
“Consumers, under these uncertain times, are likely to withhold making many significant discretionary purchases. This means the replacement cycles are likely to become longer,” he said, implying users may not buy new devices as quickly.
Moreover, Pathak said that consumers would likely buy new phones online when the quarantine ends. Some may also opt for cheaper models. This could lead to lower smartphone prices.
Both IDC and Counterpoint Research data suggested that Samsung was the market leader at the end of the first three months. Huawei and Apple
