Affected by the epidemic, domestic smartphone shipments in Q1 may drop by 30%

The ongoing outbreak of the novel coronavirus is affecting everyone's heart, including not only those who have to stay at home and cannot go out, but also manufacturers who are unable to resume work or have delayed resuming work.

Report: Demand, supply chain and other issues affect smartphone shipments in Q1

A foreign data analysis agency (Strategy Analytics) analyzed the impact of the current new coronavirus epidemic on global smartphones in 2020 and believed that "domestic smartphone shipments will drop by 30% in the first quarter."

Regarding the production situation throughout the year, Sui Qian, Director of Wireless Smartphone Strategy (WSS) Service at Strategy Analytics, believes:

In 2020, global smartphone shipments will be 2% less than expected, and China’s smartphone shipments will be 5% less than expected, with shipments in China’s smartphone market falling by more than 30% in the first quarter of this year.

Why the new coronavirus has such a big impact on smartphones, the Strategy Analytics report also mentioned the problem, on the one hand, is the reduction in demand:

The novel coronavirus has posed severe challenges to leading Chinese manufacturers such as Huawei, OPPO, vivo and Xiaomi. Strategy Analytics predicts that they will face the risk of falling demand in the domestic Chinese market in the first half of 2020, while overseas market expansion will also be affected by production capacity and travel bans. International brands such as Apple will also be troubled by insufficient production capacity and the risk of falling demand in the Chinese market.

On the other hand, it is also closely related to the supply of manufacturers. In order to control the further development of the epidemic, many places have introduced policies to extend holidays and postpone the resumption of work, but this will inevitably have an impact on the smartphone industry chain.

70% of the world's smartphones are manufactured in China, so this will also affect the global smartphone supply chain and manufacturing capacity. Delays in factory openings due to quarantine or travel restrictions will inevitably lead to temporary labor supply shortages.

Some manufacturers are experiencing supply shortages

Currently, mobile phone manufacturers are experiencing shortages in the supply chain. According to GSM arena, Asus India has sent an apology email to fans, stating that "supply chain disruptions were caused by the general situation in Asia." This announcement was made after the outbreak of the new coronavirus, and it is difficult not to associate it with the outbreak.

However, the impact of the extension of the short-term holiday on the industrial chain may not be as great as imagined. A few days ago, Foxconn announced that it had prepared an emergency plan and that Foxconn's factories would resume work in accordance with the national holiday arrangements.

However, Wuhan still occupies an important position in the mobile phone industry supply chain, and Apple has many suppliers in Wuhan. However, from the current situation, these suppliers in Wuhan seem unable to meet the manufacturing needs of iPhone.

However, according to previous media reports, Cook said in a recent conference call: "We have alternative procurement and contingency plans, and we are trying to incorporate delays in factory reopening into our work guidance."

In addition to Apple's supply chain problems, the production and sales rhythm of domestic Huami, OV products will also be more or less affected by the epidemic.

Offline channels have a huge impact

In addition to the supply chain and consumer demand, the epidemic has also had a profound impact on traditional offline channels. Judging from the sales in previous years, many consumers would purchase mobile phones through offline channels during the Spring Festival. However, due to the impact of the epidemic this year, offline channels for smartphones have been almost blocked. Relying solely on online shipments is a big blow to Huawei, OV, and Apple, which have extensive offline channels.

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In order to ensure safety, Apple announced that it would close all its stores in China until 24:00 on February 9, which not only affected offline mobile phone sales, but also affected offline after-sales services for some mobile phones. Not only Apple's offline channels were affected to a certain extent, but other manufacturers' channels were also greatly affected.

Fortunately, a considerable number of smartphones rely on online sales channels and have not been affected too much at present. It is foreseeable that the proportion of online channels in smartphones will be higher in 2020.

It is worth noting that the report released by Strategy Analytics this time assumes that the epidemic can be effectively controlled in late February and March. If there are other changes in the development of the epidemic, the report may not have more reference value.

Summarize

The impact of the new coronavirus, which originated at the end of 2019, on this year's smartphone market can be described as "profound", to borrow the words of Xiaomi Vice President Lu Weibing.

The impact of this epidemic on the mobile phone market: "In the short term, it affects consumption; in the medium term, it affects supply chain coordination; in the long term, it affects purchasing power."

Not only will manufacturers face heavy pressure, but the upstream and downstream supply chains, distributors, and even consumer demand may also change. The impact of this epidemic on the smartphone market may be beyond our imagination.

May the epidemic pass soon.