Global smartphone shipments might be lower than expected in the first half of this year, TF International Securities Group Co (天風國際證券) analyst Kuo Ming-chi (郭明錤) said in a report on Sunday in which he predicted a 10 percent decline in the shipment of Apple Inc iPhones this quarter.
The report cited three main factors that might cast a pall over the smartphone industry and its supply chain in the coming months: a sluggish Chinese market, lower-than-expected market demand for 5G handsets and disruption of the iPhone supply chain due to a coronavirus outbreak in China.
“Smartphone shipments in China dropped 50 to 60 percent on an annual basis during the Lunar New Year holidays, leading to high inventories across sales channels,” Kuo said.
Declining consumer confidence due to the rapidly spreading coronavirus would cause overall shipments in China to decrease 15 percent year-on-year to between 310 million and 330 million units this year, Kuo said.
A lack of market enthusiasm for new 5G-enabled smartphones could also play a part in the decline, he said, adding that next-generation mobile phones might fail to provide innovative user experiences.
A forerunner in the launch of 5G smartphones and claiming more than 50 percent of the global 5G smartphone market share, Samsung Electronics Co saw shipments drop 5 to 10 percent last quarter and last month to 69 million and 23 million units respectively, the report said.
“This comes to show that the arrival of 5G [smartphones] didn’t help accelerate high-end mobile phone upgrade cycles, nor did it help strengthen brand values,” Kuo said.
Brand vendors have overestimated the potential market demand for 5G smartphones, he said.
Apple, which overtook Samsung to become the top smartphone vendor in terms of shipments last quarter, is likely to face strong headwinds this quarter as its supply chain bears the brunt of the coronavirus epidemic.
As about half of Apple’s supply chain for its flagship smartphone is concentrated in China, where the outbreak began, iPhone shipments are expected to fall to between 36 million and 40 million units this quarter, compared with 38 million units in the first quarter of last year, the report said.
In an earlier report published on Thursday, Kuo predicted a delayed launch for Apple’s new products, which would include a 4.7-inch LCD iPhone, a new-generation iPad Pro, MacBook Pro and MacBook Air.
The company is expected to release a small array of devices, such as a wireless charging pad, an ultra-wideband powered Apple Tag and high-end Bluetooth headphones in the first half of the year, Kuo said.
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