COVID-19 Hits Apple and Huawei Hard... Global Smartphone Shipments Down 12% in Q1

[Asia Economy Reporter Seulgina Jo] The COVID-19 outbreak originating from China, which has alarmed the world, is delivering a direct blow to the global smartphone market in the first quarter, centered around Apple and Huawei. It is expected that global shipments over the past three months will decrease by double digits compared to a year ago.

According to analysis firm TrendForce and major foreign media on the 12th (local time), global smartphone shipments in the first quarter (January to March) are estimated to be 275 million units, a 12% decrease compared to the previous year. By company, shipments of Apple and Huawei, which have a high production ratio in China, are expected to drop by 10% and 15%, respectively. TrendForce reported, "The reopening of Foxconn's factory in China, a supplier for Apple, is delayed, and the return of employees is uncertain," adding, "The monthly delivery schedule of key components is being postponed."

Market research firm Counterpoint also estimated that it will take more than two months for production facilities in China to normalize due to COVID-19, forecasting that smartphone shipments in China in the first quarter will fall far short of previous projections. It is expected to reach only 63 million units, about 30% less than initially anticipated. Especially, if limited to offline sales, the decline is estimated to reach 70%. Research company Canalys stated, "Most stores are closed and production is also being affected," predicting that smartphone sales in China in the first quarter will be halved.

Major research firms agreed that disruptions in the supply chain within China caused by COVID-19 will inevitably affect not only future product launch plans but also second-quarter shipments due to inventory impacts.

In particular, Huawei, which is a target of the U.S. trade war, is expected to suffer the greatest damage due to its high dependence on the Chinese market. Counterpoint also predicted that Chinese brands such as OPPO and Vivo will not be able to avoid negative impacts. However, Xiaomi, OnePlus, and Realme are expected to be relatively less affected among Chinese companies. Apple was also identified as a company that cannot avoid adverse effects due to its high production ratio in China. Nikkei Business reported, citing government officials, that Foxconn’s factory, a supplier for Apple, has poor conditions and a central heating system, which increases the risk of COVID-19 spread.

However, the impact of COVID-19 is expected to continue until the first half of the year and then show signs of recovery. Counterpoint analyzed that despite the early-year setbacks in the smartphone market, considering existing sales demand, the annual basis for 2020 will show either moderate growth or a slight decline.

This content was produced with the assistance of AI translation services.