IDC: Smartphone market expected to decline by 10.6% in H1 2020

The detrimental effects of the Coronavirus on the smartphone market will be felt throughout the year and as per the latest IDC projections could lead to a 10.6% decline in shipments for the first half of 2020. On a more long-term basis, the epidemic is expected to result in a 2.3% decline in global shipments for the entire calendar year. The market was supposed to see growth this year based on early estimates before the outbreak but the situation in the last month forced a re-evaluation of the previous estimates.

The main problems for smartphone manufacturers right now are the disrupted supply chains and logistics amid work stoppage in Chinese factories over the past weeks. The resulting demand shock is expected to be felt deep into the year’s first half but a return to normal activities is expected to start around Q3 2020. Looking at the Chinese smartphone market in particular, the new estimates see a 40% dip for the January-March period compared to the same time last year.

Component shortages, factory shutdowns, quarantine mandates, logistics, and travel restrictions will create hindrances for smartphone vendors to produce handsets and roll out new devices.

The overall scenario is expected to stabilize from the third quarter of the year as the COVID-19 situation hopefully improves and 5G plans pick up the pace globally” - Sangeetika Srivastava, IDC

Looking ahead, the prognosis is that 2021 will usher in a return to growth for the global smartphone market with an estimated 6% yearly growth fueled by demand for 5G handsets.

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