IDC: Smartphone market expected to decline by 10.6% in H1 2020

Joanna Estrada
March 1, 2020

According to the market research firm's latest report, China is likely to see its smartphone shipments plummet by almost 40% in the first quarter of 2020 thanks to impact of the virus, which has resulted in factory shutdowns, supply chain disruptions and logistics restrictions.

"COVID-19 became yet another reason to extend the current trend of smartphone market contraction, dampening growth in the first half of the year".

Component shortages, factory shutdowns, quarantine mandates, logistics, and travel restrictions will create hindrances for smartphone vendors to produce handsets and roll out new devices.

Market demand for 5G devices is expected to drive shipments next year, which is forecast to grow 6.3 percent year-on-year to 1.42 billion units. The Chinese tech company is the top selling smartphone brand in China, with just over 38% market share previous year, according to IDC.

Srivastava feels the market will likely stabilize beginning third quarter of 2020 as the COVID-19 situation hopefully improves and 5G plans pick up pace globally.

Apple said last week that it no longer expects to achieve its revenue guidance for its current quarter as the coronavirus epidemic takes a toll on production and sales in China.

Demand in neighbouring regions will also remain suppressed for a brief period. PC sales are now expected to drop 9 percent in 2020 compared to a year ago, with the spread of COVID-19 "hampering supply and leading to reduced demand", IDC said. The outbreak is expected to stretch the lean phase to another year.

"We have already forgone almost a month of production given the two-week extension to the Lunar New Year break, and we expect the road to recovery for China's supply chain to be long with a slow trickle of labor back to factories in impacted provinces until May when the weather improves", Linn Huang, research VP, Devices & Displays, IDC, said in a statement. At the same time, SMEs in the phone industry, especially retail channel partners, will see the biggest effect and phone vendors that can effectively help their retail channel and other partners recover and reconsolidate after the end of the epidemic will secure more opportunities in the long term.

In a capitalist upgrade, Apple claimed it no more anticipates to satisfy the income support it offered last month for the upcoming March quarter.

Other reports by Click Lancashire

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