Smartphone market is at its worst due to the pandemic

Apple

According to recent research from analyst firms, the coronavirus pandemic has contributed to the mobile industry experiencing the worst ever first-quarter downturn. Counterpoint Research and Canalys placed the total decline in global shipments at 13 percent, but Counterpoint claims the decline was 27 percent in China alone, whereas Canalys estimates it at 18 per cent.

Whatever figures you look at, its clear, that it is the first time since 2014 that exports have fallen under 300 million, with a huge decline in China. “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 states.

Samsung, Huawei and Apple are now the top three sellers, with Apple having the lowest year-on-year drop in shipments. Both Canalys and Counterpoint place Xiaomi fourth, breaking for the first time 10 per cent of global market share.

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

“From the consumer standpoint, unless replacing a broken phone, smartphones are mostly a discretionary purchase,”  says Counterpoint Associate Director Tarun Pathak. “Consumers, under these uncertain times, are likely to withhold making many significant discretionary purchases. This means the replacement cycles are likely to become longer.”

“Most smartphone companies expect Q2 to represent the peak of the coronavirus’ impact,” Stanton says. “It will test the mettle of the industry, and some companies, especially offline retailers, will fail without government support.”

Leave a Reply

Your email address will not be published. Required fields are marked *