Phone sales to hit 10-year low in 2020 as coronavirus kills demand

Phone sales to hit 10-year low as coronavirus kills demand
The arrival of 5G devices and an influx of consumers looking to upgrade this year was meant to push the phone market back to growth for the first time since 2015. But the recent COVID-19 outbreak could instead cause shipments to drop down to a 10-year low.

Much-needed growth was expected in 2020, but not anymore

The latest market forecast by technology analyst firm CCS Insight points towards a huge year-on-year decline of 13% when it comes to phone shipments in 2020. That means almost 250 million fewer devices than originally predicted will be sold by the end of December.

CCS Insight expects manufacturers across the globe to ship a combined total of 1.57 billion mobile phones this year. Of that amount, around 1.26 billion units will be attributed to smartphone sales, down from 1.41 billion in 2019.

These predictions are based primarily on recent data from China, which shows that the lockdown massively affected demand for smartphones and mobile phones. In fact, the sales volume in January and February reportedly decline 44% from the same period in 2019.

Demand throughout this period remained stable across the rest of the globe, but the impact from the strict measures that have been implemented in the likes of Spain, Italy, and South Korea is now starting to show too.

The analyst firm in question is expecting similar drops in demand globally to the one experienced in China. That, combined with supply chain disruptions, will reportedly lead to a massive 29% drop in device shipments for the second quarter of 2020.

The second half of 2020 will be much more positive

CCS Insight says the second half of the year will be much more positive thanks to the improving situation and swift recovery in terms of demand for devices. The adoption of 5G-ready smartphones is also expected to grow.

However, it won’t all be plain sailing. Macroeconomic weaknesses in many major markets will continue to suppress sales in the second half of 2020. Even during the Holiday quarter when demand is at its highest, CCS Insight expects a year-on-year decline of 3%. That means major manufacturers including Apple, Samsung, and Huawei can all expect big impacts even towards the end of the year. 

Rumor has it Apple is struggling to keep its highly anticipated iPhone 12 5G series on schedule, which could negatively impact its sales. Samsung, on the other hand, is struggling to sell the Galaxy S20 series and, with reports now suggesting the Galaxy Note 20 series won't be much different, things aren't looking positive.

Huawei relies heavily on China and shouldn't feel as big of an impact in the second half of 2020 from coronavirus. But it'll probably be struggling with a lack of demand due to no Google services on its smartphones.

Huge growth numbers are now forecasted for 2021 and 2022

The upside to all of this chaos is that 2021 is now expected to be a pretty great year for the mobile phone industry. Shipments are expected to rise an impressive 12% year-on-year to 1.76 billion units, of which smartphones will account for 1.47 billion units, up 4% from 2019.

2022, on the other hand, could represent an all-time high for the mobile phone market with shipments growing to an incredible 1.99 billion units. That is even higher than the 1.98 billion sold in 2015 and can be primarily attributed to the 5G smartphone market.

The latter is expected to grow 10-fold this year to around 210 million units. But by the time 2024 comes around, the vast majority of devices shipped globally will be 5G-ready at shipments of around 1.15 billion units.

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