A 56% plunge in China's mobile phone market in February

In response to the epidemic, the Chinese mobile phone market may have experienced the worst month in the past few years. After all, consumers are staying at home and stores are empty, which will inevitably affect offline sales. Now major manufacturers can only rely on e-commerce channels to maintain operations, but this is not enough to make up for the gap.

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The decline in mobile phone sales is obviously no longer a surprise, but the actual data still exceeded many people's expectations.

Data from the China Academy of Information and Communications Technology show that in February 2020, the total shipments of the domestic mobile phone market were 6.384 million units, a sharp drop of 56% year-on-year, of which 4G mobile phones accounted for 3.96 million units and 5G mobile phones accounted for 2.38 million units.

If we add the data from January this year, the total shipments of the domestic mobile phone market will be 27.197 million units, still a year-on-year decline of 44%.

Specifically in terms of product categories, in February 2020, smartphone shipments were 6.341 million units, a year-on-year decrease of 54.7%, of which Android phones accounted for 92.2% of smartphones.

This means that Apple's iPhone shipments in China in February were likely to be less than 500,000 units; in January, the number was around 2.3 million.

In fact, the impact of the epidemic is no longer beyond Apple's expectations.

At the earnings conference at the end of January this year, Apple CEO Cook also gave a revenue forecast of $63 billion to $67 billion for the next quarter. The reason for the fluctuation range of nearly $4 billion was due to the uncertainty about the impact of the epidemic. At that time, Cook believed that China's supply factories should resume work around February 10.

But in mid-February, Apple sent another letter to investors, saying that the company was likely to fail to achieve its revenue expectations for the next quarter. Although some factories had resumed production at this time, "progress was still relatively slow compared to what was expected."

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At the same time, Apple also temporarily closed all Apple Stores in China in February. This situation lasted for nearly two weeks until the domestic epidemic situation improved recently and they were reopened.

As the impact of the epidemic gradually spreads globally, Cook recently approved a plan to allow employees in Apple offices around the world to work from home, and some Silicon Valley technology companies such as Microsoft, Intel and Facebook have also taken similar measures.

It is not clear whether the epidemic will affect Apple's new product launches and WWDC this year. The industry generally believes that Apple should release a series of new products such as iPhone SE2 and new iPad Pro in March. Under the current situation, it is not ruled out that Apple will choose to update directly on the official website as it did last year.

Some analysts also revealed that this year's new 5G iPhone launch conference may be delayed by one month.

In addition to Apple, large companies such as Huawei and Samsung are also facing challenges of varying sizes.

A report from The Information stated that Huawei recently announced its 2020 shipment target internally, which is expected to be 190 million to 200 million units, a year-on-year decrease of about 20%. This is also the first time Huawei has faced negative growth in recent years.

The decline in shipments is undoubtedly due to the epidemic, but also due to the impact of US sanctions, which has resulted in Huawei's newly launched mobile phones being unable to obtain authorization for Google services. This makes it difficult for Huawei to continue its original business in Western Europe and other regions, which have always been markets where Huawei mobile phones have performed relatively strongly.

In order to make up for the lack of Google services, Huawei has recently officially announced the launch of "Huawei Mobile Services (HMS)", which includes Huawei's own applications such as the application market, browser and map. As for whether overseas consumers can accept this new service, it depends on the subsequent market feedback.

Samsung's recent situation is not optimistic. According to Yonhap News Agency, Samsung's latest flagship Galaxy S20 series did not perform well in South Korea. The first day sales of the phone were about 70,000 units. In contrast, last year's S10 sold about 140,000 units in South Korea, and the Note 10 sold about 220,000 units.

The head of a local Korean telecommunications company also said that the sharp drop in the number of visitors to offline stores, lower-than-expected subsidies from operators, and fewer discounts were all factors contributing to the sluggish sales.

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In addition, the Financial Times also reported that due to the spread of the epidemic in South Korea, Samsung has suspended operations at its local factories several times and transferred some production lines to Vietnam to ensure the production of its latest flagship phones Galaxy S20 and Galaxy Z Flip.

All in all, the current depression in the mobile phone industry may continue for some time. Research firm IDC has also previously predicted that due to the impact of the epidemic on the supply chain and the decline in consumer demand for replacement phones, the Chinese mobile phone market is expected to experience a year-on-year decline of more than 30% in the first quarter.

If the epidemic is under control by March, the market may enter a recovery period, but it will still be difficult to return to the level of the same period last year.