Coronavirus Outbreak May Halve China's Smartphone Sales in First Quarter
Smartphone sales in China could be reduced by as much as 50 percent in the first quarter of 2020 because of the impact the coronavirus outbreak is having on the retail and manufacturing sectors, according to new research.
Speaking to Reuters, research firm Canalys said that the closure of production facilities and retail stores by Apple and other tech companies will not only hit smartphone sales, but also impact product launches scheduled to take place in the first quarter of this year.
"Vendors' planned product launches will be canceled or delayed, given that large public events are not allowed in China," said Canalys researchers. "It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments."
Apple isn't expected to unveil a 5G phone until September, when the "iPhone 12" series is expected to be announced, but other vendors like Huawei reportedly hoped to see a boost in sales on the back of China's 5G network rollout.
Apple in early February closed all of its corporate offices, stores, and contact centers in China due to the coronavirus outbreak that originated in Wuhan. The stores aren't expected to reopen as planned on February 10 because of ongoing concerns.
Meanwhile, Foxconn's Zhengzhou site, which is the most critical production site for the iPhone 11 and the upcoming low-cost iPhone, is seeing significant delays. The plant originally planned to resume work on February 2, but that has been postponed by at least one week.
There have already been multiple reports suggesting these closures will have an impact on Apple device production, and we could see dwindling device supplies and lengthening shipping times in the near future.
According to one report, Apple's ability to meet supply/demand balance of AirPods and AirPods Pro is in jeopardy due to the outbreak. The delays may also affect the upcoming low-cost iPhone that Apple is expected to launch as early as this March.
In his most recent report, respected Apple analyst Ming-Chi Kuo declined to provide new shipment forecasts in light of the coronavirus outbreak because "there are still many uncertainties" but last week he lowered his iPhone shipment forecast by 10 percent to 36 to 40 million units during Q1 2020 due to the coronavirus.