Smartphone shipments have been slashed across the industry during the first three months of 2020, though Xiaomi managed to post some year-on-year growth.
It might have only been marginal, a far shot from what the management team would have expected as this point last year, but a 1.4% year-on-year increase for Xiaomi shipments was as good as it got for the worlds’ leading smartphone manufacturers.
“The coronavirus pandemic caused the global smartphone market to experience its worst decline ever,” said Anshul Gupta of Gartner. “Most of the leading Chinese manufacturers and Apple were severely impacted by the temporary closures of their factories in China and reduced consumer spending due to the global shelter-in-place.”
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Perhaps the most worrying aspect of this report from Gartner is the anticipation of the next one. Let’s not forget, the vast majority of societal lockdown procedures started during the latter stages of Q1 and continued through the majority of Q2. With economies beginning to reopen, consumer confidence is likely to be very low, resulting in delays to big ticket purchases. The smartphone slowdown is highly likely to extend throughout Q2, possibly pushing into the next quarter.
As one would expect, the fortunes of the different players are quite varied.
“Huawei will have a challenging year,” Gupta said. “It has developed the Huawei Mobile Service (HMS) ecosystem, but with the lack of popular Google apps and Google Play store, Huawei is unlikely to attract new smartphone buyers in international markets.”
For Huawei, trust and credibility are big factors. Yes, it has a solid reputation for manufacturing smartphones, but hardware is very different to software. It has an uphill battle to convince customers, both old and new, that its devices will deliver the desired experience without the Android ecosystem to underpin it.
Apple on the other hand, has a lot to be excited about.
In September (or October, if you believe the rumours), the iGiant will unveil its own attempt to crack the 5G market. This is a moment many analysts have been looking forward to, as few companies have the power to sway the opinions of the masses like Apple does. This launch could push 5G into the mainstream markets, such is the loyalty of Apple customers.
OPPO is an interesting company as it has been credited as one of the better performers when it comes to offline distribution and sales, though that was obviously severely distributed by COVID-19. This is a wake-up call, with the team needing to reinforce its online presence to ensure greater resiliency.
2020 is going to be a very tough year for the smartphone manufacturers and any company where products or services would be considered an expensive luxury. The damage inflicted to the industry during this pandemic will not be limited to Q1, though recovery could certainly be varied.
Apple has a lot to look forward to, though September might not come soon enough, as perhaps a major event is what the industry needs. Something to inspire the consumer and reinvigorate enthusiasm in technology purchases while pushing 5G into the mainstream market. Let’s hope sluggish sales trends do not drag through to September, but it is a very realistic possibility.