1Q Shipment Volume Down 10.6%... Recovery Expected from 3Q
IDC China 1Q Shipment Volume Forecasted to Drop 40% Year-on-Year
Due to the impact of the novel coronavirus infection, the Myeongdong shopping street in Seoul is showing a quiet scene despite it being the weekend on the 9th. Photo by Yoon Dong-joo doso7@
[Asia Economy Reporter Han Jinju] Due to the novel coronavirus infection (COVID-19), the smartphone market in the first half of this year is expected to shrink by about 10% compared to last year.
On the 1st (local time), market research firm IDC analyzed that smartphone shipments in the first half of 2020 will decrease by 10.6%. In the long term, due to the impact of COVID-19, smartphone shipments are expected to decline by 2.3% over the entire year. Last year's forecast predicted growth in the smartphone market this year, but the spread of COVID-19 completely reversed the outlook.
The Chinese smartphone market has been severely affected. Smartphone shipments in the first quarter of this year are expected to decrease by 40% compared to last year. Due to COVID-19, the decline is much larger than last year's forecast for Chinese smartphone shipments (-5%). As the Chinese government extended the Lunar New Year holiday to prevent the spread of COVID-19, manufacturers with factories in China, such as Huawei and Apple, have been unable to carry out normal smartphone production and parts procurement. The schedule for new product launches planned in the mid to long term has also been put on hold.
Apple announced on the 17th of last month that due to the outbreak of COVID-19, manufacturing and sales of iPhones in China are not proceeding smoothly, making it difficult to meet performance forecasts. Prior to this, Apple had lowered its first-quarter (January to March) earnings forecast by $30 billion from the fourth quarter of last year to $63 billion to $67 billion. Apple stated, "Although production work has resumed, the return to normal conditions is progressing more slowly than expected."
The smartphone market is expected to return to normal track only by the third quarter of this year. IDC explained, "Smartphone manufacturers are affected in launching new products due to parts shortages, factory shutdowns, strengthened quarantine measures, and logistics and travel restrictions," adding, "As COVID-19 subsides and the introduction of 5G networks accelerates in various countries, stability will be achieved from the third quarter." IDC forecasts that the smartphone market will grow by about 6% in 2021 due to increased demand for 5G smartphones.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
