The 2019-nCoV aka Chinese coronavirus outbreak has severely affected the business of Chinese companies as well as those abroad. 361 people have died so far and over 17,000 people have been infected in China. While the Chinese government is actively trying to combat the spread of the virus in the country, stores, restaurants, and other businesses are either closed or operating in limited capacity over the past few days. Unsurprisingly this will affect the smartphone shipments in the first couple of quarters of 2020. And according to a recent report from Strategy Analytics, the Chinese smartphone shipments in Q1 2020 could decline by a staggering 30%.

The Strategy Analytics report points out that the coronavirus will slow down the GDP growth and consumer spending in China. This, in turn, will affect the smartphone market in the country in the first half of 2020. The report highlights that global smartphone shipments will likely drop by 2% due to the coronavirus epidemic. The Chinese smartphone shipments in 2020 are expected to drop by 5%. However, the biggest impact will be in the first quarter where the shipments are expected to drop by 30%.

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The report further notes that China manufactures nearly 70% of the world’s smartphones. Therefore, delay in the factory operations due to the extended New Year holidays and travel restrictions and quarantine will adversely affect the global supply and manufacturing. We are already seeing the first signs of a supply shortage due to this epidemic – Asus ROG 2 is in short supply in India right now.

The report further adds that the impact of coronavirus on smartphone shipments in China could be worse if it’s not controlled in the next couple of months.

The coronavirus epidemic in China has also affected smartphone launch events. We still haven’t heard anything about the Xiaomi Mi 10 launch, which was earlier expected before February 11 in China. In fact, new reports claim that the Mi 10 flagship and the new Black Shark gaming smartphone could get an online release in the country. This makes sense given how the Chinese government is discouraging companies from organizing events during this period. Even Huawei postponed its developer conference in China last week from February 11 to March 27. Accessories for the Galaxy S20 lineup are also expected to be delayed.

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Beyond all the razzmatazz that accompany the entry of a new phone model, the smartphone industry has been on a consistent decline due to saturation. This trend is not specific to China but the domestic market seems to have taken most of the hit due to the fact that most Android phones are from Chinese OEMs. China Telecom Institute recently released its analytic report on the domestic mobile phone market in China for the month of March 2019. The report shows that a total of 28.373 million mobile phones were shipped in March which represents a 6% tumble when compared to figures from the same period last year. 

The data shows that the shipment is an improvement over that of February. Smartphones accounted for 94.9% of the mobile phone shipments during the period. An estimated 26.963 million smartphones were shipped which is a 4.1% drop year-on-year. 

The report also shows that the first quarter of 2019 saw the market ship 76.931 million units of mobile phones, down by 11.9% YoY. 4G mobile phones accounted for 73.17 million units which represent a 10.5% reduction, going by the data collected during the same period last year. However, 4G phones accounted for 95.3% of mobile phone shipment during the period. An estimated 3.57 million feature phones (2G) were shipped during the period while just 45000 3G phones made it to consumers.

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In March 2019, 52 new models were launched, down 35.0% year-on-year. The new models included eleven (11) 2G mobile phones and forty-one (41) 4G mobile phones. While from  January-March, 125 new models were launched, down 39.3% year-on-year. The new models that were launched during the period include twenty-four (24) 2G mobile phones, one 3G mobile phone model, and 100 4G mobile phones.

(source)

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