IDC: China smartphone shipments expected to decrease by 40% in Q1

Affected by the new coronavirus, global smartphone sales will decline by 2.3% this year, with shipments slightly higher than 1.3 billion units, a report released by IDC on Thursday said.

The new coronavirus COVID-19 will exacerbate the decline in smartphone shipments. IDC estimates that in the first half of 2020, smartphone shipments will decline by 10.6% year-on-year.

IDC said that global shipments may increase again in 2020, in part because of the increased market focus on 5G.

IDC expects that for transportation challenges, manufacturing and logistics will take several quarters to recover as Chinese workers gradually return to factories.

The company said in a press release that China's demand shock extends several quarters but is mitigated by the end of the year with the aid of government-backed stimuli and subsidies. Demand in surrounding regions will also be briefly suppressed.

COVID-19 became yet another reason to extend the current trend of smartphone market contraction, dampening growth in the first half of the year, said Sangeetika Srivastava, senior research analyst with IDC's Worldwide Mobile Device Trackers.

Srivastava added:

While China, the largest smartphone market, will take the biggest hit, other major geographies will feel the hit from supply chain disruptions.

Component shortages, factory shutdowns, quarantine mandates, logistics, and travel restrictions will create hindrances for smartphone vendors to produce handsets and roll out new devices.

The overall scenario is expected to stabilize from the third quarter of the year as the COVID-19 situation hopefully improves and 5G plans pick up the pace globally.

"For the epicenter, China, we forecast the domestic market to drop by nearly 40% year over year for first quarter and even with a potential March recovery it will still be difficult to reach last year's levels," said Will Wong, research manager with IDC's Asia/Pacific Client Devices Group.

"Buyers will purchase from online channels, which will account for a significantly increased share of phones sold in the first half of 2020 and may represent a permanent shift in buying behaviors."