People wearing face masks following the coronavirus disease (COVID-19) outbreak are seen at an Apple store as the new iPhone SE goes on sale, in Hangzhou, Zhejiang province, China April 24, 2020. China Daily via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. CHINA OUT.
(Reuters) – Global smartphone shipments will fall nearly 12% to 1.2 billion units in 2020, market research firm IDC said on Wednesday, citing lower consumer spending due to the economic impact of the coronavirus crisis.
The COVID-19 pandemic has not only disrupted business supply chains, with major smartphone makers such as Apple Inc and Samsung Electronics Co Ltd flagging financial hits, but also squeezed consumer spending worldwide.
“Nationwide lockdowns and rising unemployment have reduced consumer confidence and reprioritized spending towards essential goods, directly impacting the uptake of smartphones in the short term”, said bit.ly/3036tkj Sangeetika Srivastava, senior research analyst with IDC.
Apple, which was forced to shut retail stores in the United States and Europe following the outbreak, introduced discounts on the iPhone 11 in China and released a new low-price SE model to weather a plunge in global smartphone demand.
Research firm TrendForce said in April it expected global smartphone production to slump a record 16.5% in the June quarter from a year earlier.
That follows a 10% drop in output worldwide in the March quarter, when the outbreak spread and peaked in China before sweeping through Europe and the United States.
However, shipments from China’s factories to vendors rose 17% in April from a year earlier, suggesting signs of an early rebound in domestic demand in the world’s largest smartphone market.
In China, where the economy has begun to reopen and factories have resumed operations, IDC expects a single-digit decline in this year.
The research firm also expects upcoming 5G deployment to help the recovery of smartphone shipments next year, adding it does not expect growth to return until the first quarter of 2021.
Reporting by Ayanti Bera in Bengaluru; Editing by Ramakrishnan M.