The coronavirus outbreak will hurt all major smartphone manufacturers except Samsung.
If you thought the abolition of World World CongressThis year in Barcelona will be bad for the industry, you are mistaken. The effects of the ongoing outbreak of coronavirus on global smartphone production and global sales are much worse.
It is clear that the local smartphone market in Chinawill experience the greatest decline as a result of the fact that many factories have recently been forced to suspend all operations. According to Apple, iPhone demand and assembly have also taken a pretty big hit. This is because the Cupertino tech giant relies heavily on China-based manufacturing facilities and partners to produce the iPhone, and naturally the same goes for other companies— starting from Huawei, ending with Xiaomi, Oppo and Vivo. As a result, the coronavirus epidemic practically does not affect only one major smartphone manufacturer. We are talking about the largest mobile phone manufacturer, which is not headquartered in China and is not particularly popular in these regions.
China is not only the most populousthe country in the world, but also the largest smartphone market: 85 million devices were produced at the regional level only in the fourth quarter of 2019, and the total number last year amounted to 369 million devices, while in India there were only 148 million.
As mentioned above, the coronavirus outbreakwill hurt all major smartphone manufacturers except Samsung, since its production capacity is concentrated mainly in Vietnam. The Korean clearly didn't realize that betting on "low-cost smartphone production" in Vietnam rather than China would pay off in that unlikely but real scenario of a deadly disease shutting down the entire industry.
According to Reuters, the effect of coronavirus onsmartphone production in Vietnam has so far been "limited", which means Samsung's global sales should remain relatively stable until the end of the current quarter. But, looking to the future, the leading smartphone manufacturer in the world is likely to be subject to long-term problems, supplying many components from China, as well as all its main (and secondary) competitors.
After the preparation of the preliminary report onthe impact of a coronavirus outbreak on smartphone supply chain last week TrendForce expanded its initial forecasts. It is expected that the production of smartphones in the first quarter of 2020 will continue to be 275 million units, which is 12% less than the same period last year, which is the lowest quarterly figure for the last five years.