Coronavirus: Smartphone production to drop 12% to 275 mn in first quarter

Smartphone production is forecast to drop 12 percent to 275 million units in the first quarter, registering a five-year low.
Smartphone customers on 4G networkDelayed work resumption and uncertainties in employees’ returns – due to coronavirus — will cause delay in the monthly delivery of key components, affecting the progress of smartphone production in China, according to TrendForce.

The outbreak is not expected to cause an immediate break in the supply chain, once work resumes at smartphone assembly vendors’ production bases on February 10. Future developments will depend on the work resumption status of upstream supply chains and the import / export of goods through customs.

The shortage of active / passive components and camera modules, which began even before Chinese New Year, will exacerbate the problem of smartphone component shortage because of their low inventory levels or labor-intensiveness.

The main production base of Samsung Electronics is in Vietnam. Samsung’s smartphone business accounts for only 2 percent of the domestic market in China. Samsung has suffered the least damage from the outbreak.

Since Samsung sources some of its components from China, its smartphone production will be 71.5 million units.

Huawei, which ranks second in terms of quarterly production volume, was placed on the U.S. Entity List and subsequently prevented from installing GMS on their newer models, lowering their overseas sales. Huawei is projected to produce 42.5 million units in 1Q20.

Apple made arrangements for its employees to work from home in an effort to reduce risks of infection, but this has the side effect of slowing down the development of new iPhones in H2 2020, with component certification coming to a near halt. The upcoming release of iPhone SE2 (also known as iPhone 9) will be impacted. iPhone production will be about 41 million units.

Xiaomi primarily relies on online sales, with a relatively low market share in China at about 9 percent. Xiaomi’s smartphone unit will manufacture 2.47 million units of smartphones during the first quarter.

Oppo will manufacture 2.4 million units of smartphones during the first quarter. Vivo will produce 1.7 million units of smartphones.

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