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China smartphone sales may decline 20% in Q1: Counterpoint
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SME Times News Bureau | 13 Feb, 2020
In the wake of the novel coronavirus outbreak, sales of smartphones in
China may decline 20 per cent in the first quarter of this year,
according to an estimate by Counterpoint Research on Thursday.
While
companies like Huawei, OPPO and Vivo could suffer the most due to this
decline, the impact may be limited on smartphone makers like Xiaomi,
OnePlus and Realme "as they are more online-centric and
overseas-focused".
The novel coronavirus (COVID-19), which
originated in China's Wuhan area in December 2019 has impacted social
and production activities in the country.
To curb the spread of
the coronavirus epidemic, the Chinese government issued a strict travel
ban on January 24 following which retail and commerce activities slowed
sharply, Counterpoint said.
"Demand-wise, we see the market
getting impacted severely. We estimate more than a 50 per cent YoY
(year-onyear) decline in offline smartphone sales during the lock-down
period. Therefore, we have lowered our sales forecast 20 per cent for
Q1," Brady Wang, Associate Director at Counterpoint Research, said in a
statment.
"The situation may worsen and we may lower our forecast
even more depending on the February sales. The plummet in Q1 is likely
to generate a surge in channel inventories and further influence
shipments and new products launches through Q2," Wang said.
The coronavirus outbreak has led to the death of over 1,300 people in China.
"Huawei
group is likely to suffer as China has accounted for over 60 per cent
of its total smartphones sales. OPPO and Vivo will also be impacted
because of their greater reliance on offline sales channels. The
influence on sales of Xiaomi, OnePlus and Realme will likely be less
severe as they are more online-centric and overseas-focused," Flora
Tang, Research Analyst at Counterpoint Research, said.
As Apple
announced a shutdown of its offline stores across China until February
15, the company could face a sales loss of about one million units of
iPhones.
"Apple's new product development plans will also be
affected as engineers from the USA and Taiwan cannot travel to China.
The iPhone SE2 set for a late March launch is likely to have troubles in
ramping up volume due to the insufficient labour force in Foxconn's
Zhengzhou factory," Mengmeng Zhang, Research Analyst at Counterpoint
Research, added.
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