Global smartphone production could suffer record drop in Q2 2020

Global smartphone production could suffer record drop in Q2 2020
The smartphone industry has been suffering terribly since February because of the COVID-19 pandemic. The situation is slowly starting to improve, but TrendForce is still predicting a huge drop in production output this quarter.

The biggest production decrease on record


Investigations by TrendForce show that global smartphone production dropped by 10% year-on-year to around 280 million units in the first quarter of 2020. That number is the lowest in five years and can be attributed to the serious supply chain disruptions in China.

Newer data reveals an improving situation thanks to China, which seemingly has the pandemic under control and has allowed workers to resume their positions at manufacturing and assembly lines across the country.

Production during the current quarter is now estimated to hit 287 million units, up slightly from the first quarter. Unfortunately, the number represents a huge year-on-year drop of 16.5% – the largest decrease on record for a given quarter.

Taking all of this into consideration, TrendForce now forecasts a total yearly smartphone production volume of 1.24 billion units, down a considerable 11.3% from 2019.

Samsung will suffer badly this quarter


Regarding individual manufacturers, the market research firm expects some major smartphone brands to report lower smartphone production output. Market leader Samsung could be severely affected in the coming months.

The South Korean giant suffered a relatively limited impact during the first quarter because it only holds 1-2% of the Chinese smartphone market and manufactures most of its devices in India and Vietnam. Unfortunately, the second quarter could be much worse. 

Assembly lines in India have been suspended since late March and demand in the United States and Europe has collapsed. TrendForce thus estimates Samsung’s production in the second quarter will fall 10.7% quarter-on-quarter to 58.3 million units.

The miracles continue for Huawei


Huawei suffered virtually no impact in terms of smartphone production during the first quarter because it managed to resume work soon after the Lunar New Year holiday and experienced continued demand in China. 

Production in the first quarter reached 46 million units and, if the economy in China continues to improve and Huawei manages to sustain sales in Europe as expected, this number could grow to 48 million units in the second quarter.

The company is betting heavily on 5G smartphones but continues to push its 4G lineup, which should account for more than half of Huawei’s smartphone output during the first half of 2020. 

The new iPhone SE – Apple's savior 


Following in third place last quarter was Apple with an iPhone production output of 37.9 million units, down 8.7% year-on-year. Demand for the iPhone 11 and other premium models has decreased in recent weeks, but TrendForce expects production levels to remain unchanged.

That is primarily down to the newly released iPhone SE, which has been well-received by consumers across the globe. Whether Apple can reach its production targets in the second half of 2020 remains unclear, though.

TrendForce previously estimated 200 million units for the year and, although Apple still plans to release four 5G iPhones in October/November, the firm believes COVID-19 could severely impact demand, forcing the company to reduce output.

Xiaomi, Oppo, and Vivo will all reduce output


As for Xiaomi, Oppo, and Vivo, TrendForce is forecasting pretty huge production declines this quarter.

Around 70% of Xiaomi's smartphone sales come from overseas markets and the lack of demand will reportedly force the company to slash production to 27.5 million units. That would represent a 10.7% decrease.

Oppo and Vivo, on the other hand, are expected to manufacture 30 million and 24.5 million units respectively. That means both brands will experience a decrease of around 14%.

FEATURED VIDEO

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.
FCC OKs Cingular's purchase of AT&T Wireless