Friday, 01 May 2020 09:22

Smartphone shipments fall below 300m units for first time in a quarter Featured

Smartphone shipments fall below 300m units for first time in a quarter Image by 272447 from Pixabay

Global smartphone shipments have fallen below 300 million units for the first time in a quarter, falling 13% year-on-year during the first quarter of 2020, the technology analyst firm Counterpoint Research says, adding that this is the first time since 1Q 2014 that the number of units shipped has fallen below this figure.

The company said this first-quarter drop to 295 million units was driven largely by a 27% year-on-year decline in shipments to China, with the country's overall share of the global market falling from 26% to 22%.

Shipments of 5G smartphones increased their share from 1% in the first quarter of 2019 to 8% in 1Q2020.

Chinese firms Xiaomi and realme achieved growth of 7% and 157% year-on-year, the only two companies to show positive figures. Apple remained largely unaffected, with shipments falling only 5% for the quarter.

The coronavirus pandemic had affected supply of handsets and components for some OEMs and this would have an effect on global shipments for a longer period, Counterpoint said. But it could lead to OEMs diversifying their supply chain across regions, with an upside for countries like India and Vietnam.

smartphones global 1q2020

Counterpoint associate director Tarun Pathak said: “From the consumer standpoint, unless replacing a broken phone, smartphones are mostly a discretionary purchase. Consumers, in these uncertain times, are likely to withhold making many significant discretionary purchases.

"This means the replacement cycles are likely to become longer. Lockdowns in most parts of the world will be lifted in a staggered way, which will mean it could take time before retail activity completely resumes.

"Even after the lockdown ends, there will likely be changes in consumer spending patterns. Online channels are likely to be preferred and there will likely be shifts in the price band distribution with some consumers opting for a cheaper device, which could lead to a decrease in overall average selling prices.

"OEMs will have to embrace a more omnichannel strategy. Retailers will also have to find ways to reach their consumers digitally. This could increase the adoption of O2O (online to offline) channels and hyper-local delivery services in smartphones.

"However, users staying at home are engaging on their smartphone more than ever. This provides opportunities for services like mobile gaming and OTT services. This will likely lead to operators being able to upsell to larger data packages with higher ARPUs.”

The pandemic has also affected the rollout of 5G in some countries. Counterpoint research analyst Varun Mishra said: “COVID-19 has disrupted the implementation plans of 5G in some countries, with auctions being postponed in markets like Spain and India.

"However, led by Huawei, the growth of 5G in China remains as expected. As the situation returns to normal, the 5G sales will be further driven by OEMs including Samsung, OPPO, vivo, Xiaomi and realme launching devices in the sub-US$300 price band.

"This is likely to be complemented by SoC players launching cheaper 5G-capable chipsets. The share of 5G smartphones increased to 8% in Q1 2020, compared to 1% in Q4 2019. 5G is likely to help the rate of recovery during the second half of 2020.”

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.





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