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Smartphone sales hit a 10-year low in 2019

(Image credit: Future)

Sales of mobile phones are set to slump to their lowest level for a decade due to the impact of coronavirus, new research has suggested.

Analysts at CCS Insight predict the market will slow by 13 per cent as the crisis impacts normal economic activity, the supply chain, and consumer demand.

The effects of government restrictions will be particularly acute in Q2, when a 29 per cent drop in sales is forecasted.

Smartphone sales slump

Signs of recovery in China have been noted. But observers say that any return to normal sale rates and production levels will by offset by issues in other markets and manufacturing centres. In total, nearly a quarter of a billion fewer devices will be sold in 2020 compared to 2019, with the total figure reaching 1.57 billion.

"Data from China gives us a good indication of the effect that lockdowns and consumer uncertainty have on demand for phones,” said Marina Koytcheva, vice president of forecasting at CCS Insight. “In  January and February 2020, sales volume fell 44 per cent from the same period in 2019. Early data from other countries that have introduced strict measures to fight the pandemic suggests similar declines.

“Some companies are now having to deal with being unable to meet demand for certain products. This is particularly painful because they have only a short window of opportunity before people and businesses switch strictly into money-saving mode. In the aftermath of the current situation, we expect the biggest detrimental impact on sales will come from weak demand.”

However it is thought that delayed purchases and the spread of 5G will see a significant upturn from 2021 onwards. CCS says sales will increase by 12 per cent in 2021, outpacing 2019 by four per cent, while in 2022 there will be a growth rate of 13 per cent. This will lead to sales surpassing 2 billion.

By then, 5G coverage will have increased significantly and vendors will have released more affordable handsets. Sales of 5G-enabled phones will reach 210 million units and by 2024 will account for 58 per cent of all devices sold that year.