Vertical Divider
Forecasters Expect China to Reduce Smartphone Shipments by 15% in 2020
February 16, 2020
Canalys figures China’s smartphone sales could plunge by as much as 50% in the first quarter, as many retail shops have closed for an extended period and production has yet to fully resume due to the fast spread of a new coronavirus, according to research reports. “Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China,” said in a note last week. “It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments.” Canalys expects China’s smartphone shipments to halve in the first quarter from a year ago, while IDC, another research firm that tracks the tech sector, forecasts a 30% drop from their previous forecast. Shipments were 85.3m in Q419, but only 41m in Q119 and 326m in 2019, so these pronouncements might be an overreaction to the current conditions.
Foxconn received government approval on Monday to resume production at a plant in the city of Zhenghzou, but its major plant in Shenzhen remain closed.
“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,” Will Wong, an IDC analyst, said. Globally, smartphone production will decrease by 12% in the March quarter to a five-year low of 275 million units, according to Trendforce. It revised down iPhone production by 10% to 41 million units, while Huawei’s output forecast was cut by 15% to 42.5 million phones.
Samsung Electronics Co is seen the least affected by the virus outbreak as its main production base is in Vietnam lowering its production forecasts by just 3% to 71.5 million units. Should the outbreak of the coronavirus in China prolong to June, sales of smartphones in the country would be slashed by about 15% to 280 million units in 2020 Shipments in 2019 were 327m. The number of handset inventory turnover days in China is normally 20 days, but the turnover days of smartphones for the top-four vendors - Huawei, OPPO, vivo and Xiaomi - have risen to more than 40 days recently.
February 16, 2020
Canalys figures China’s smartphone sales could plunge by as much as 50% in the first quarter, as many retail shops have closed for an extended period and production has yet to fully resume due to the fast spread of a new coronavirus, according to research reports. “Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China,” said in a note last week. “It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments.” Canalys expects China’s smartphone shipments to halve in the first quarter from a year ago, while IDC, another research firm that tracks the tech sector, forecasts a 30% drop from their previous forecast. Shipments were 85.3m in Q419, but only 41m in Q119 and 326m in 2019, so these pronouncements might be an overreaction to the current conditions.
Foxconn received government approval on Monday to resume production at a plant in the city of Zhenghzou, but its major plant in Shenzhen remain closed.
- Huawei said its manufacturing capacity is “running normally” without specifying further. But like many other local peers, Huawei relies heavily on third-party manufacturers for production.
- Xiaomi Corp, Huawei, and OPPO, are all expected to announce flagship devices in the first half. OPPO told Reuters that while the impact of the virus will affect operations at some local factories, “manufacturing capacity can be guaranteed effectively” thanks to its plants overseas. Xiaomi did not respond to requests for comment.
“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,” Will Wong, an IDC analyst, said. Globally, smartphone production will decrease by 12% in the March quarter to a five-year low of 275 million units, according to Trendforce. It revised down iPhone production by 10% to 41 million units, while Huawei’s output forecast was cut by 15% to 42.5 million phones.
Samsung Electronics Co is seen the least affected by the virus outbreak as its main production base is in Vietnam lowering its production forecasts by just 3% to 71.5 million units. Should the outbreak of the coronavirus in China prolong to June, sales of smartphones in the country would be slashed by about 15% to 280 million units in 2020 Shipments in 2019 were 327m. The number of handset inventory turnover days in China is normally 20 days, but the turnover days of smartphones for the top-four vendors - Huawei, OPPO, vivo and Xiaomi - have risen to more than 40 days recently.
Contact Us
|
Barry Young
|