The outbreak of coronavirus has taken a toll on virtually every aspects of human endeavour, including but not limited to jobs, transportation and health services. Latest figures show that mobile phones shipment has for the first time, taken a huge dip, reports LUCAS AJANAKU.
The International Data Corporation (IDC) forecasts a year-on-year drop of 11.9 per cent in this year’s smartphone shipments.
This follows the largest-ever year-on-year decline in history in the first quarter of 2020.
The drop in shipments was expected to be larger in the first half of the year, with a predicted 18.2 per cent decline over this period.
The decline is due to the economic impact of the COVID-19 pandemic, which the IDC said, continues to affect consumer spending.
It also believes that global smartphone shipments are not expected to return to a position of growth until the first quarter of 2021.
“What started as a supply-side crisis has evolved into a global demand-side problem,” said senior research analyst at the IDC’s Worldwide Mobile Device Trackers Sangeetika Srivastava.
“Nationwide lockdowns and rising unemployment have reduced consumer confidence and reprioritised spending towards essential goods, directly impacting the uptake of smartphones in the short term.
“On the brighter side, 5G is expected to be a catalyst throughout the forecast period, which will play a vital role in worldwide smartphone market recovery in 2021,” he added.
Despite a heavy initial struggle in the country, China is expected only to see a single-digit decline in 2020 due in part to factories resuming operations and supply chains becoming more fluent.
“China’s recovery has been impressive to say the least, especially given the initial impact of COVID-19 on the country,” said Programme VP of the IDC’s Worldwide Mobile Device Trackers Ryan Reith.
In contrast, European markets which have been severely impacted by the pandemic – including Italy and Spain – are set to cause a double-digit decline in the region.
Reith believes that the economic issues faced by the world will result in fluctuations in the vendor and price-tier landscapes.
“We believe this will result in even more aggressively priced 5G smartphones than expected prior to the pandemic.
“This could result in some share wins for the vendors that position their portfolios to capitalise on this change,” he said.
Smartphone sales in the first quarter of this year decreased by 20.2per cent year-on-year, according to data from Gartner.
This is an unprecedented decline which saw four of the world’s five most popular smartphone brands suffer significantly decreased sales.
“The coronavirus pandemic caused the global smartphone market to experience its worst decline ever,” said Gartner senior research analyst Anshul Gupta.
“Most of the leading Chinese manufacturers and Apple were severely impacted by the temporary closures of their factories in China and reduced consumer spending due to the global shelter-in-place.”
According to the report, Samsung had increased its inventory in the channel as it prepared for new launches, but the lockdown combined with its “inefficient online channel” led to weaker sales to end-users.
“COVID-19 negatively impacted Samsung’s smartphone sales during the quarter. However, the decline could have been much worse,” said Gupta.
“Its limited presence in China and the location of its manufacturing facilities outside of China prevented a steeper fall,” the report said.
Huawei gets lion share
The report found that of the five biggest smartphone brands, Huawei suffered the worst over the first quarter of this year.
Huawei’s smartphone sales declined by 27.3per cent year-on-year, Gartner said.
However, it still managed to hold onto its spot as the second-biggest smartphone brand ahead of Apple.
“Huawei will have a challenging year.
“It has developed the Huawei Mobile Service (HMS) ecosystem, but with the lack of popular Google apps and Google Play store, Huawei is unlikely to attract new smartphone buyers in international markets,” said Gupta.
Apple suffers marginally
While Apple’s sales also decreased, this was ‘only’ by 8.2per cent – which is a substantially lower drop than Samsung and Huawei experienced.
“Apple had a strong start to the year thanks to its new product line up that saw strong momentum globally,” said Gartner Research Vice President Annette Zimmermann.
“If COVID-19 did not happen, the vendor would have likely seen its iPhone sales reach record levels in the quarter.
“Supply chain disruptions and declining consumer spending put a halt to this positive trend in February,” Zimmermann added.
She said Apple’s ability to serve clients through its online stores and its production returning to near normal levels at the end of March helped it to recover some of its early momentum.