A fresh report from research firm Canalys suggests, that the smartphone market took a turn for the worse, registering a steep fall of 13% in Q1 2020. Of course, the culprit was coronavirus, having hit electronics supply chains well below the belt.
Smartphone market started 2020 on a strong note, on the wave of 2 consecutive quarters of growth. In February, companies were concerned about building more smartphones, for they were struggling to keep up with the demand as coronavirus was wreaking havoc in China. However, as March set in, things took a turn for the worse. By now, most of the companies had fixed their supply issues, but half of the world being in lockdown caused sales to plummet.
“Smartphones are still a necessity for most people, and device availability in online channels has enabled those who need to replace a broken or lost phone to do so. But many customers who would have bought a new smartphone as a luxury have delayed that purchase.,” Canalys Senior Analyst Ben Stanton said.
As a result, most mobile companies registered a slowdown. Samsung, which managed to regain its position at the top of the table, registered a 17% fall in shipment. The company managed to brush off the impact of coronavirus in its earlier stages, mostly because of its manufacturing focus being in Vietnam and Korea instead of China. However, it was not late before the company’s shipments started alluding the effects of COVID 19. The company managed to ship 59.6 million units, retaining a 21.9% market share.
Huawei came in second, as the company tended to juggle with shifting its focus from the overseas market to its homeland. U.S.’s decision to ban the company from operating in country limits, pushed its luck to the edge, resulting in a 17% reduction in worldwide shipments. To make matters even worse, worldwide shipment fell by a dreadful 35%, as the company’s first P series handset, P40, launched without Google Mobile Services. The company shipped 49 million units, and managed to amass an 18% market share.
Apple was able to preclude a disaster, and managed to make it to the top 3. The company registered a slowdown of 8%, and managed to ship 37.1 units worldwide, causing its market share to become 13.6%.”Apple was one of the least affected vendors, owing to strong sales of the iPhone 11 in the early stages of the quarter. Its recent iPhone SE launch is strategically vital, as Apple needs to prop up iPhone shipments as its flagship customers await 5G devices,” said the report from Canalys.
Xiaomi and Vivo, even though originating from China, managed to grow during the first quarter, defying all odds. Both registered a 9% and 3% growth in shipments respectively, while completing 30.2 and 24.2 million shipments worldwide. This put Xiaomi’s market share at 11.1%, while Vivo had to content itself with 8.9% of the market.
However, coronavirus is not done with the industry yet, suggests Canalys. Stanton adds “Most smartphone companies expect Q2 to represent the peak of the coronavirus’ impact.”
“It will test the mettle of the industry, and some companies, especially offline retailers, will fail without government support. As lockdowns around the world start to lift, the full economic damage will become visible. Smartphone companies must adapt their strategies to mitigate the impact, as cashflow will be critical in the coming months. But if they cut back too much on product spend, marketing spend and new strategic initiatives, they risk losing agility, and will lose ground to rivals once demand bounces back. It is vital to strike a balance,” he added.
