Coronavirus impact: China’s smartphone sales may decline 20% in Q1

In the wake of the novel coronavirus outbreak, sales of smartphones in China may decline 20% in the first quarter of this year, according to an estimate by Counterpoint Research on Thursday.

While companies like Huawei, OPPO and Vivo could suffer the most due to this decline, the impact may be limited on smartphone makers like Xiaomi, OnePlus and Realme "as they are more online-centric and overseas-focused".

The novel coronavirus (COVID-19), which originated in China's Wuhan area in December 2019 has impacted social and production activities in the country.

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To curb the spread of the coronavirus epidemic, the Chinese government issued a strict travel ban on January 24 following which retail and commerce activities slowed sharply, Counterpoint said.

"Demand-wise, we see the market getting impacted severely. We estimate more than a 50 per cent YoY (year-onyear) decline in offline smartphone sales during the lock-down period. Therefore, we have lowered our sales forecast 20 per cent for Q1," Brady Wang, Associate Director at Counterpoint Research, said in a statment.

"The situation may worsen and we may lower our forecast even more depending on the February sales. The plummet in Q1 is likely to generate a surge in channel inventories and further influence shipments and new products launches through Q2," Wang said.

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The coronavirus outbreak has led to the death of over 1,300 people in China.

As Apple announced a shutdown of its offline stores across China until February 15, the company could face a sales loss of about one million units of iPhones.

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"Apple's new product development plans will also be affected as engineers from the USA and Taiwan cannot travel to China. The iPhone SE2 set for a late March launch is likely to have troubles in ramping up volume due to the insufficient labour force in Foxconn's Zhengzhou factory," Mengmeng Zhang, Research Analyst at Counterpoint Research, added.