The worldwide smartphone market suffered its largest ever contraction during the first quarter of 2020 as the effects of the coronavirus crisis took hold.
The quarter coincided with the imposition of lockdown restrictions, most notably in China. The country is the world’s largest market for smartphones, accounting for a quarter of all shipments, and is a major part of the global supply chain.
This meant that both the supply and demand elements of the equation were impacted. Figures from IDC show total shipments fell by 11.7 per cent to 275.8 million devices with China suffering a drop of 20.3 per cent. The US declined by 16.1 per cent and Western Europe fell by 18.3 per cent.
Worldwide smartphone sales
"What started as primarily a supply-side problem initially limited to China has grown into a global economic crisis with the demand-side impact starting to show by the end of the quarter," said Nabila Popal, research director with IDC's Worldwide Mobile Device Trackers. "While the supply chain in China started to recover at end of the quarter, as IDC expected, major economies around the world went into complete lockdown causing consumer demand to flatline.
“Consumers get increasingly cautious about their spending in such uncertain times and it is hard to think smartphone purchases won't suffer as a result. This drop in demand, combined with the lockdowns and closures of retail shops across the globe, strongly impacted all consumer device markets, including mobile phones. As the uncertainties of the lockdowns and total economic impact linger, vendors are reconsidering their outlook for 2020."
Samsung remains the world’s biggest manufacturer with 21.1 per cent of the market despite shipments falling by 18.9 per cent. The success of its mid-range A series of handsets helped to maintain demand but IDC says the company could struggle later in the year when it plans to launch two new flagships – the Galaxy Note 20 and the Galaxy Fold 2.
Economic slowdown might mean consumers turn to cheaper devices instead, although the higher prices of these devices might improve profitability.
Huawei is still number two with 17.8 per cent of the market. Shipments fell by 17.1 per cent but price cuts and online sales helped to mitigate the company’s exposure to the Chinese market. The company’s prospects in Europe have been hit by US sanctions on the company that restrict access to American technologies.
Apple bucked the trend with just a 0.4 drop in shipments to hold onto the number three spot. The Cupertino-based company shipped 36.7 million units in the quarter thanks to the success of the iPhone 11. The relatively high cost of the iPhone means Apple could be particularly susceptible to any move towards cheaper devices, a trend that it has hoped to pre-empt with the launch of an updated version of the iPhone SE.
Chinese pair Xiaomi (10.7 per cent) and vivo (9 per cent) both increased market share thanks to success in India and are the fourth and fifth largest vendors respectively. Other manufacturers account for 28.1 per cent of the market.
With lockdown measures in China being eased, it is hoped that the market can recover through delayed purchases. It had been hoped that demand for 5G and new form factors like foldables would return the market to growth in 2020 however it may not be until 2021 that vendors benefit.