Global smartphone shipments are to fall nearly 12 percent to 1.2 billion units this year, market research firm International Data Corp (IDC) said on Wednesday, citing lower consumer spending due to the economic effects of the COVID-19 pandemic.
The annual forecast follows a record 11.7 percent year-on-year drop in the three months ending March.
The latest projections are a dramatic revision of an annual forecast by IDC in February, after the virus first hit, that predicted a 2.3 percent decline.
Photo: Wang Yi-hung, Taipei Times
The pandemic has not only disrupted business supply chains, with major smartphone makers such as Apple Inc and Samsung Electronics Co flagging financial hits, but also squeezed consumer spending worldwide.
“What started as a supply-side crisis has evolved into a global demand-side problem,” IDC senior research analyst Sangeetika Srivastava said in a statement. “Nationwide lockdowns and rising unemployment have reduced consumer confidence and reprioritized spending toward essential goods, directly impacting the uptake of smartphones in the short term.”
Apple, which was forced to shut retail stores in the US and Europe following the outbreak, introduced discounts on the iPhone 11 in China and released a new low-price SE model to weather a plunge in global smartphone demand.
Taipei-based research firm TrendForce Corp (集邦科技) said in April that it expected global smartphone production to slump a record 16.5 percent in the second quarter from a year earlier.
That follows a 10 percent drop in output worldwide in the March quarter, when the outbreak spread and peaked in China before sweeping through Europe and the US.
However, shipments from China’s factories to vendors rose 17 percent in April from a year earlier, suggesting signs of an early rebound in domestic demand in the world’s largest smartphone market.
In China, where the economy has begun to reopen and factories have resumed operations, IDC expects a single-digit decline this year.
Europe, on the other hand, has suffered a heavier toll from the pandemic and is expected to experience deeper falls in spending and demand, it added.
The research firm also expects upcoming 5G deployment to help smartphone shipments recover next year, adding that it does not expect growth to return until the first quarter of next year.
Additional reporting by Bloomberg
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