IDC reports that the smartphone industry has suffered its worst-ever year-over-year sales shortfall thanks to COVID-19.
“What started as primarily a supply-side problem initially limited to China has grown into a global economic crisis with the demand-side impact starting to show by the end of the quarter,” IDC research director Nabila Popal says. “While the supply chain in China started to recover at the end of the quarter … major economies around the world went into complete lockdown causing consumer demand to flatline … This drop in demand, combined with the lockdowns and closures of retail shops across the globe, strongly impacted mobile phones.”
According to IDC, hardware makers sold 275.8 million smartphones in Q1 2020, a drop of 11.7 percent compared to the 312.3 million units they sold in the year-ago quarter.
“With the average sequential decline over the last three years hovering between 15 percent to 20 percent, this is the largest annual (year over year) decline ever,” the IDC report notes. “The largest regional decline in 1Q20 was in China, which saw shipments drop 20.3% year over year.”
This makes sense: China was hit first by COVID-19, in January, while the western world didn’t really succumb to the economic effects of the resulting lock-downs until March. So any view of the first quarter is skewed by these facts. And since then, the China-based electronics supply chain has largely resumed, while lock-downs continue in the west and will impact sales this quarter and probably beyond. In other words, it’s going to get worse.
“The global economic downturn is expected to have an adverse impact on the Chinese economy and consumer sentiment as well and only allow the [smartphone] market to achieve annual growth in the fourth quarter,” the IDC report agrees.
As for the top sellers of smartphones, Samsung retained its traditional number one spot by selling 58.3 million units, achieving 21.1 percent market share. But that figure also represents a 19 percent drop from the 72 million units it sold in the same quarter one year ago. Huawei was number two with 49 million units (17.8 percent market share, down 17.1 percent), and Apple was number three with 36.7 million units (13.3 percent market share, down 0.4 percent).