The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday.
The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said.
With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone makers as they also face rising costs across the supply chain, the report said.
As the pandemic grows in scale, fostering uncertainty and triggering a recession that could potentially surpass the 2008 global financial crisis, smartphone demand is likely to weaken further, it added.
TrendForce forecast that global smartphone shipments would decline to 274 million units in the first quarter of this year, down from the 307 million units it had previously estimated.
The researcher also slashed its forecast for laptop shipments in the first quarter by 20.3 percent to 27.9 million units, as Chinese production in February was hampered by the coronavirus.
As the situation stabilizes in China next month, laptop production and the supply of upstream materials are expected to return to normal, but there is likely to be falling demand for laptops as the pandemic sweeps the globe, it said.
With lockdowns affecting most of Europe and the US, which account for more than 50 percent of global laptop sales, TrendForce has trimmed its shipments forecast for this year by 3.5 percent to 156.7 million units.
Despite an increase in demand for education-use Chromebooks and commercial laptops as more people work from home, the pandemic has dealt a blow to consumer confidence and the industry as a whole, it added.
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