Smartphone sales in China are expected to drop by as much as an alarming 50 percent in Q1 2020, given that several retail stores have remained closed for a long time. To make matters worse, production hasn’t resumed fully citing the coronavirus crisis, research reports say.

The virus outbreak has claimed more than 1000 lives and disturbed China’s manufacturing industry. Huawei and other popular Chinese smartphone manufacturers were gearing up for the country’s 5G rollout this year in a bid to help the world’s largest smartphone market make a comeback after a long period of declining sales.

Last week in a note, research firm Canalys said, “Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China.” The note points out that vendors will need more time to adjust the roadmaps for their product launch in China, which is likely to put a damper on 5G shipments.

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While Canalys predicts China’s smartphone shipments to drop by 50 percent in the first quarter from last year, IDC (International Data Corporation), on the other hand, expects a 30 percent drop. For those unaware, IDC is a research firm that monitors the tech sector.

Last week, Apple Inc announced its plan to extend the suspension of its retail store in China and said it hasn’t decided when they will re-open, since Foxconn, which assembles iPhones, is struggling to fully restart work at its factories. Although Foxconn got a stamp of government’s approval to restart production at a plant located in Zhengzhou, its more important plant in Shenzhen is still closed.

Without providing more details, Huawei, which is touted China’s biggest smartphone vendor, said the manufacturing capacity of the company is “running normally”. Just like the rest of the local companies, Huawei too relies on third-party manufacturers when it comes to production.

According to analysts, factories must resume production to their full capacity without delay, as this could hamper brands’ ability to make their latest products available in the market. Keeping in line with that, China’s popular Android brands including Xiaomi, Huawei, and Oppo are all slated to unveil their flagship devices in Q1 2020.

Despite the virus affecting operations at a few local factories, Oppo told Reuters that “manufacturing capacity can be guaranteed effectively” as it has plants located overseas as well. Xiaomi; however, refrained from responding to requests for comment.

IDC analyst Will Wong said, “The delays in reopening factories and the labor return time will not only affect shipments to stores, but it will also affect the product launch times in the mid- and long-term.”

On Monday, research firm TrendForce revealed that smartphone production on a global scale will drop by 12 percent in the March quarter, which converts to a five-year love of 275 million units. The research firm readjusted iPhone production by 10 percent to 41 million units, while Huawei’s production forecast was revised down to by 15 percent to 42.5 million units.

The world’s top handset maker, Samsung is likely to be the least affected by the coronavirus outbreak, as its major production plant is based in Vietnam. The report forecasts, Samsung could lower its production by a mere 3 percent to 71.5 million phones.

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As predicted by the Analysts, the Chinese smartphone market is on the decline this year. After a continuous decline in the last quarter, Chinese smartphone makers witnessed another record decline in the Q3 2018. As per the recent report from China’s Ministry of Industry and Information Technology, the domestic mobile phone market is down by 11.7%  in comparison to the same time last year. Further, the market witnessed a decline of 19.7% on a quarter-on-quarter basis.

In Septemeber, around 95 devices were launched which is about 26% less than the same period last year and 65.5% on a quarter-on-quarter basis. Most of the smartphones that have launched are 4G based and caters around 70% of the devices manufactured. Approximately, 18 3G mobile devices were launched in the same span of time.

Similarly, 4G smartphones garnered 94.8% sales accounting for 37.012 million units. While 2G and 3G sales remained at 10000 units and 0.8 million units respectively. The decline can also be seen on the 2G and 3G smartphone sales as they have slumped 22.6% and 529.9% respectively.  In the same period, 2G sales remained 49,000 units, down 90% in comparison to the past year.

In total, 635 new phones were launched since the start of this year. Out of these, 144 models were 2G compatible, and 488 models were out there with 4G support. This year, only a single 3G compatible device launched in China.

Overall, since the starting of this year, the domestic smartphone shipments reached 305 million which is down 17% year-on-year basis. Out of the total 305 million sales, over 276 million units were of local brands while international brands, majorly Apple generated remaining sales.

• Read More: China smartphone shipments rebound in Q2 2018: Digitimes

Most of the sales are garnered by the top 10 manufacturers in China which includes, Xiaomi, Huawei, Apple and Samsung. Over 92% of sales were constituted by these manufacturers, which is an 8% increase in comparison with the same period last year.

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