Published: March 30, 2020 1:39:11 pm
The smartphone market saw a yearly decline of 14 per cent in sales in the month of February 2020, according to a new report by Counterpoint Research. The research firm’s analysis indicates that the market has shown some resilience and the fall is not as bad as it was expected, given the coronavirus outbreak, which has disrupted supply chains across the world. However, the fall is higher on the supply side, as global smartphone shipments declined 18 per cent in February 2020, though again this was lower than expected.
The biggest impact of COVID-19 was in China in the month of February, according to the research. This is not surprising, given the epidemic only started spreading outside of China more actively towards the end of February and early March, and continues to do so in other countries.
China, which was the initial epicentre of the epidemic saw a massive 38 per cent decline, but according to Counterpoint is starting to rebound. The biggest drop was in offline sales, more than 50% during February in the China market, though online sales were stronger.
One player which had a relatively more stable supply chain was Samsung given it is not so dependent on China for manufacturing. Samsung has moved its factories to markets like Vietnam and India. Samsung managed to capture 22 per cent global smartphone market share in terms of sales volumes.
However, players like Apple faced a negative impact thanks to the coronavirus outbreak given its supply chain was impacted in China in earlier February. Counterpoint notes that this has impacted Apple’s sales performance. But Chinese player Huawei, managed much better selling more than 12 million smartphones during February, and saw just a 1 per cent drop in global market share.
Still, the overall global smartphone market has started to show weakness from February onwards with consumers growing more cautious. But March is expected to be worse, given that more countries have gone on a lockdown in light of the coronavirus outbreak. Counterpoint expects that Europe will suffer in the month of March and they expect to see a 25-30 per cent drop in countries like Italy, Switzerland and Spain. Italy and Spain are facing the worst of the pandemic with a high death toll.
“The global smartphone market is largely a replacement market, meaning that smartphones are a discretionary purchase. Nevertheless, they are now seen as a vital part of daily life – especially so for those enduring extended periods of isolation or remote working. So while people may delay purchasing due to the coronavirus pandemic, especially in the early part of the crisis when the disruption and uncertainty are both high, they will still replace their smartphone at some point. This means that sales will not be entirely lost – just delayed,” Peter Richardson, VP and Research Director said in a statement.
In India too, analysts have predicted a negative impact given the lockdown which has been imposed for 21 days, and will continue till April 14. Samsung, Oppo, realme, vivo and others have already closed their manufacturing units in India, and many have delayed upcoming smartphone launches as well. Along with that, players like Amazon and Flipkart are no longer delivering products which are non-essential, so the online channel is also impacted.
“We are expecting a major slump in consumer demand till June at least and demand is likely to shift towards the second half, especially festive season,” Tarun Pathak, Associate Director at Counterpoint Research had said in a earlier comment to indianexpress.com. “Consumers may go for less expensive devices or buy in case of absolute necessity. We are expecting April and May will be hard and it all depends on how measures we are taking now impact the overall flattening of curve,” he added.
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