World smartphone shipments to fall 12 percent this year on virus woes: IDC

Reuters

Posted at Jun 04 2020 08:38 AM

People wearing protective face masks walk next to a Huawei advertisement and an Apple store in Shanghai following an outbreak of the novel coronavirus disease (COVID-19), in Shanghai, China May 25, 2020. Aly Song, Reuters

Global smartphone shipments will fall nearly 12 percent to 1.2 billion units in 2020, market research firm IDC said on Wednesday, citing lower consumer spending due to the economic impact of the coronavirus crisis.

The COVID-19 pandemic has not only disrupted business supply chains, with major smartphone makers such as Apple Inc and Samsung Electronics Co Ltd flagging financial hits, but also squeezed consumer spending worldwide.

"Nationwide lockdowns and rising unemployment have reduced consumer confidence and reprioritized spending towards essential goods, directly impacting the uptake of smartphones in the short term", said Sangeetika Srivastava, senior research analyst with IDC.

Apple, which was forced to shut retail stores in the United States 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.

Research firm TrendForce said in April it expected global smartphone production to slump a record 16.5 percent in the June 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 United States.

However, shipments from China's factories to vendors rose 17% 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 in this year.

The research firm also expects upcoming 5G deployment to help the recovery of smartphone shipments next year, adding it does not expect growth to return until the first quarter of 2021.