After Counterpoint predicted around a 30% decline in smartphone shipments in China in the first quarter of the year, Digitimes has also predicted a significant decline in shipments in the same period. According to the Taiwanese publication’s report, the market could see a drop of around 9% in the best-case scenario, assuming the epidemic is controlled by the end of February 2020.
Digitimes notes that Chinese consumer demand has significantly weakened due to the coronavirus outbreak. Further, government measures to contain the epidemic is likely to affect the supply of smartphone and notebook component supply in the region. The report further adds that smartphone makers such as Huawei, OPPO, Vivo, and Xiaomi are all sitting on high inventory levels. These companies were planning to sell off a significant chunk of its smartphone stock in the Chinese New Year period but failed to do so.
MediaTek, who is an important player in the Chinese smartphone market will also bear the brunt of the recent epidemic. Digitimes predicts that the chipmaker could see a sequential decline of nearly 15% in its revenues in the first quarter of the year.
Even if the outbreak is controlled by the end of February, its effects are likely to be felt in the second and third quarters of 2020. It remains to be seen whether smartphone makers revise their quarterly and yearly targets in the coming weeks.
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(Source)
