The global smartphone market might not recover as anticipated this year as the COVID-19 outbreak creates greater uncertainties, a report released yesterday by market advisory firm International Data Corp (IDC) showed.
The report forecasts a 2.3 percent year-on-year decline in shipments this year to 1.34 billion units.
“COVID-19 became yet another reason to extend the current trend of smartphone market contraction, dampening growth in the first half of the year,” IDC senior research analyst Sangeetika Srivastava said, predicting a 10.6 percent fall in shipments from 644 million units a year earlier.
As an outbreak of COIVD-19 in China continues to hamper manufacturing and logistics across the industry, with local factory workers struggling to resume production amid persisting transportation challenges, IDC forecasts a multi-quarter period for the recovery of smartphone production.
“While China, the largest smartphone market, will take the biggest hit, other major geographies will feel the hit from supply chain disruptions,” Srivastava said. “Component shortages, factory shutdowns, quarantine mandates, logistics and travel restrictions will create hindrances for smartphone vendors to produce handsets and roll out new devices.”
“The overall scenario is expected to stabilize from the third quarter of the year as the COVID-19 situation hopefully improves and 5G plans pick up the pace globally,” Srivastava added.
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.
In the meantime, smartphone makers are likely to reschedule key product launches intended in the first half of the year as the outbreak hinders production, casting a pall over the industry, the report said.
Changes in schedules might lead to further adjustments of product plans in the short run and would even affect the supply chain in the long run, it added.
“For the epicenter, China, we forecast the domestic market to drop by nearly 40 percent year-over-year for the first quarter, and even with a potential March recovery it will still be difficult to reach last year’s levels,” IDC research manager Will Wong said.
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