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Coronavirus Could Be the Reason for China’s Smartphone Shipments to Drop 30%

With the further spread of coronavirus, Chinese business faces a new challenge. At the end of Q1 2020 that ends in March, China’s smartphone shipments could drop by over 30%.

International Data Corporation (IDC) stated:

“The coronavirus outbreak impacted the Lunar New Year’s shopping season in late January and is also expected to have adverse effects in the following months. China’s smartphone shipments to drop more than 30% year-on-year in 2020Q1. The virus will create uncertainty in product launch plans, the supply chain, and distribution channels, in the mid and long term.”

China’s top Android producers Xiaomi Corp, Huawei, and Oppo have all hoped to enjoy a good performance. Huawei had expected China’s 5G rollout plans this year would help the world’s biggest smartphone market rebound after years of falling sales. However, their plans are far from executing.

Research firm Canalys said:

“Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China.”

Earlier, Canalys stated that China’s smartphone shipments could drop by 50%.

“Technology vendors are likely to stall marketing activities as they are unlikely to divert attention to new product launches, such as 5G devices. It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments in 2020,” wrote the experts.

According to IDC, Chinese consumers may abandon the idea to adopt 5G-enabled phones, despite Chinese makers introducing premium models that take advantage of next-generation networks. 5G handsets would require lower pricing, better network coverage, and good use cases. In 2019, handset producers shipped 370 million units, but IDC believes China could see an annual drop of 4% in smartphone shipments this year.

The outbreak of dangerous coronavirus has not only claimed the lives of hundreds of people. It has also created a new level of uncertainty for global markets. And the Asian market was the first to go down, with stocks plunging. Besides, it has placed the businesses with activity in China in jeopardy. For example, the oil industry has suffered greatly, with Exxon Mobil and BP tanking. Further, tourism got into hot water. After the World Health Organization (WHO) declared the new coronavirus strain as a worldwide health emergency, many countries have placed compulsory restrictions on people traveling from China.

Amid the coronavirus, even Tesla (TSLA) stock began to fall as well. In October last year, Tesla secured an agreement with the Chinese government. This was the first time China allowed a foreign company to set up a factory in the country. Tesla took advantage of this deal and built its Shanghai factory in less than a year. But with the virus, Tesla has temporarily closed its stores in China. Other companies that have also closed their operations in China include Apple, Google, and also McDonald’s.

Coronavirus Could Be the Reason for China’s Smartphone Shipments to Drop 30%

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