China’s Smartphone Sales May Drop Down By 50% In Q1

The ongoing Coronavirus outbreak in China is getting deadly by the day and the death toll has reached over 1000 people now. The epidemic has affected almost all industries and as per the reports by a Research firm Canalys (via Reuters), China’s smartphone sales may drop down by as much as 50% in the first quarter, because of the fast spread of the Coronavirus. The plunge in sales can be owed to the fact that several retail shops have closed for an extended period now and their production is yet to start again.

According to the Research firm, Canalys, “Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China”. Because of this, it’s going to take time for vendors to change their product launch roadmaps and would further reduce the 5G shipments. As per Canalys, China’s smartphone shipments are expected to halve in the first quarter from a year ago whereas another research firm, IDC, predicts a 30% drop. IDC analyst, Will Wong, also further added that “the delays in reopening factories and the labor return time will not only affect shipments to stores, it will also affect the product launch times in the mid- and long-term”.

Moreover, if factories fail to restore and continue their production in its fullest capacity, it would further prevent brands from bringing forth their newer products to the market. Talking about how the factories are holding up amidst the deadly Coronavirus spread when it comes to production, Apple will be extending its retail store closures in China while Foxconn will be resuming its production at a plant in the city of Zhenghzou.

It’ll also reopen a major plant in the southern city of Shenzhen. As per the reports, Huawei’s manufacturing capacity is also running in a normal way while Oppo’s manufacturing capacity can be guaranteed effectively because of its plants that it has overseas.

It’s quite evident that the fatal Coronavirus epidemic is sure to take a toll over China’s smartphone sales but it’s also going to put a major damper on the overall global sales of smartphones. This can be blamed on a slew of different reasons including shutting down of Chinese factories, delay in resuming work, untimely delivery of the key smartphone components, and zero clarity around when the employees would return for work.

A research firm, TrendForce, predicted that smartphone production in the first quarter of 2020 can fall down by 12% because of the Coronavirus outbreak. Moreover, even if the products are all ready and released, it would still dampen the end-user sales and will impact the purchasing activity of the users.

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