Why it matters: The coronavirus is having an effect on the world economy, and one of the hardest areas hit could be smartphone sales in China. According to analysts, the precautions taken against the virus could see handset sales fall by up to 50 percent.
The coronavirus has disrupted several tech industry sectors, from canceled conferences, to delayed shipments, to numerous MWC pullouts. With many retail stores in China closed for an extended period and production delays, research firm Canalys expects that the world’s biggest smartphone market will see shipments halve in the first quarter compared to one year ago.
“Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China,” wrote the company. “It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments.”
IDC, the other big analyst group, believes smartphone shipments in China will drop 30 percent. “The delays in reopening factories and the labour return time will not only affect shipments to stores, it will also affect the product launch times in the mid- and long-term,” wrote company analyst Will Wong
Reuters writes that market research firm Trendforce on Monday cut its march-quarter forecast for iPhone production by about 10% to 41 million handsets—something analysts agree with. There has been some good news for Cupertino, though: supplier Foxconn has restarted production at its Zhengzhou plant, albeit with only 10 percent of the factory’s workforce. The company still hasn’t been allowed to restart production at its Shenzhen plant.
Huawei, which canceled its developer conference over the coronavirus, has resumed production of consumer and carrier equipment, and its operations are running normally.
According to investment bank Jefferies Group, the disruption in China could see the PlayStation 5 and Xbox Series X delayed or suffer from limited stock.