China smartphone market under outbreak: Apple Xiaomi Store Q1 shipments will be reduced by 30%

The outbreak of pneumonia caused by the new coronavirus is expanding further. As of 24 February, the National Health and Health Commission has received a cumulative total of 14380 confirmed cases from 31 provinces (autonomous regions, municipalities directly under the central government) and Xinjiang Production and Construction Corps, 2110 cases of severe illness, 304 cumulative deaths, 328 cases of cured discharge, a total of 1 suspected cases 9544 cases.

The continuous development of the epidemic has affected all levels of society, such as education, transportation, catering, tourism, business, etc.

The smartphone industry, which is closely related to people’s lives, is naturally no exception.

China’s smartphone market Q1 shipments will fall by more than 30% 

On January 30, Strategy Analytics, a leading market research firm, released a report entitled “How does the new coronavirus affect the global and Chinese smartphone market?” The report, which concluded that the outbreak of the new coronavirus will hit China and the global economy in the first half of 2020, and that the smartphone market will be adversely affected in many ways.

Global smartphone shipments will be 2% lower than expected in 2020 and 5% lower than expected in China due to fear and “paralysis” caused by the new coronavirus, according to a new report by Strategy Analytics Wireless Smartphone Strategy (WSS) Service Director Yu. Among them, shipments in China’s smartphone market will decline by more than 30% in the first quarter of this year.

This prediction is not a hollow wind.

There is no doubt that GDP will inevitably be affected in the face of the outbreak in China and the global economy, and consumer spending will plummet, which will obviously affect smartphone sales;

Of course, China is not only the world’s largest smartphone consumer market, but also the world’s largest smartphone manufacturing industry chain. According to Strategy Analytics, 70 percent of the world’s smartphones are made in China, so this will also affect the supply chain and manufacturing capacity of smartphones around the world, and delays in plant starts due to isolation or travel restrictions will inevitably lead to temporary labor shortages.

At the smartphone manufacturer level, whether it’s Huawei or OPPO, vivo and Xiaomi, these smartphone giants inevitably face challenges. Strategy Analytics expects these handset brands to be at risk of falling demand in China’s domestic market in the first half of 2020, while expansion in overseas markets will also be affected by capacity and travel bans.

Of course, international brands such as Apple are also at risk of running out of capacity and china’s market demand.

In the report, Strategy Analytics specifically noted that the above projections are based on the current development of the outbreak and the assumption that it will be effectively controlled in late February and March. If the development of the epidemic in China and the world cannot be effectively controlled at these times, the negative impact on the market will further expand and worsen.

Smartphone industry in the context of the outbreak

Even from what is already facing you, the outbreak has had a direct impact on China’s smartphone market.

As recently as February 1, Apple China issued an official statement saying:

We are thinking about those most directly affected by the coronavirus and the staff who study and control the outbreak around the clock. From now until 9 February, we will close all offices, retail stores and call centres in mainland China, with extreme consideration and the latest advice from experts.

Of course, Apple’s online stores are still on the market while it closes off-line retail stores.

China smartphone market under outbreak: Apple Xiaomi Store Q1 shipments will be reduced by 30%

Analysts at Wade Bush Securities in the U.S. said traffic in China’s major cities was affected, with limited traffic in Shanghai, Beijing and other cities, and that Apple’s sales of 1 million smartphones in china are expected to be affected if it continues into the end of February. Sales of these phones are likely to be delayed from the first quarter to the second quarter.

At the same time, the analyst added that the 1 million figure, which accounts for less than 3% of annual iPhone sales in China, may have little impact on Apple and less on Apple’s share price.

Of course, outside of Apple, Xiaomi Homes has previously announced that it will close from January 28 to February 2.

It is worth mentioning that on Weibo, Xiaomi Group Vice President and President of China Lu Weibing answered a question from netizens about “Do you think this outbreak has an impact on consumers’ mobile phone purchasing power?”

China smartphone market under outbreak: Apple Xiaomi Store Q1 shipments will be reduced by 30%

And from the more general situation, because of the impact of the outbreak, many off-line mobile phone stores across the country have closed, and consumers are no longer as in previous years have the enthusiasm to shop to buy.

On the manufacturing side, as early as January 29, Foxconn Technology Group announced that its resumption of work after the Spring Festival holiday in the mainland campus will be on February 10, and that in addition to Foxconn, the resumption of work after the Spring Festival of mobile phone parts or manufacturers such as Invista, Oofilight, Yu optical, and Gore Acoustics was generally postponed until February 10th. Right.

It is worth noting that although there is no official news, but on Weibo, there are already many voices that the first half of this year’s mobile phone launch will be delayed because of the outbreak, or directly online.

Summarize

No matter what the point of view, the outbreak caused by the new coronavirus infection will affect the development of various industries in China’s economy and society, the smartphone industry will inevitably be overwhelmed by the outbreak, just one microcosm, but given China’s unique position in the global smartphone industry chain, this impact is bound to spread to the world.

Hope that this outbreak will be brought under control as soon as possible!