For several months now, the world has been facing a major health crisis linked to Covid-19. A pandemic that has an impact on the daily lives of millions of people around the world, forcing them to remain confined to their homes. At the same time, many industries suffer from this lack of activity, particularly on the economic level. This is particularly the case of the smartphone industry which is experiencing a significant drop in demand.
Several companies specializing in statistics agree on this point, even if their figures diverge. According to IDC, the drop in smartphone shipments worldwide in the first quarter of 2020 is 11.7%, for Strategy Analytics, it is rather around 17%. As for Canalys, the drop recorded would be 13%. It's hard to know who's right, but we can still estimate, based on these figures, that demand for smartphones dropped by more than 10% during the first months of 2020.
A drop in production
The production of smartphones was impacted from the start of the epidemic simply because the majority of smartphones are assembled in China. However, the country was shutdown for several weeks, stopping the production of smartphones. While some manufacturers were able to temporarily call on factories located outside of China, this was not the case for all. Furthermore, the volumes produced in these relief factories were not necessarily of the same order.
Shortages and longer delivery times may have impacted the purchase of some consumers. They could also turn to another model to be delivered faster or simply postponed their purchase.
Over the weeks, the epidemic has grown and exported, first to Europe, then to the United States. Several countries have implemented containment measures to limit the spread of the virus among their populations. A decision which had the consequence of drastically reducing professional and therefore economic activity. Millions of people around the world have become unemployed. Buying a new smartphone was no longer a priority for many.
Beyond the budget that this represents, buying a new smartphone has little interest when you are confined to your home.
Different repercussions for manufacturers
The smartphone sector was hit at the start of the year with the cancellation of the Mobile World Congress, the high mass dedicated to communications technologies which was to take place last February in Barcelona. The manufacturers of smartphones have not however deprived themselves to lift the veil on their new creations. Thus, Samsung presented the new versions of the S20 last February, before the implementation of containment in many countries.
Despite the evolution of the situation, the other manufacturers have not postponed the presentation of their new phones. At the end of March, Huawei lifted the veil on its new smartphone, the P40. In mid-April, OnePlus also maintained the presentation of its new models, the OnePlus 8 and 8 Plus. The same goes for Apple, which presented the iPhone SE last month, an affordable smartphone arriving in a context that could be favorable to it.
The presentation of new models - ranges that are usually very popular with consumers - has not prevented a drop in demand for the top 3 smartphone sellers. Samsung, the leader in the smartphone market, recorded an 18.9% drop in demand in the first quarter of 2020, according to IDC.
For Huawei, the coronavirus resulted in a 17.1% drop in demand. As for Apple, in third place in the ranking of sellers of smartphones, the American company also experienced a drop in demand for its iPhones in the first quarter. According to Strategy Analytics and Canalys, it would be around 8 to 9%. An estimate in line with what Apple announced during the presentation of its financial results.
If some countries are preparing for deconfinement, demand for smartphones should continue to fall in the second quarter of 2020 according to analysts, even if manufacturers hope to revive the economy thanks to 5G which could push many consumers to renew their equipment.
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