Coronavirus could cut China’s smartphones sales in half this quarter

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iPhone sales are finally rebounding in China
iPhone sales were starting to pickup in China.
Photo: Tim Cook/Weibo

Smartphone sales in China could fall by as much as 50 percent in the first quarter thanks to a raging coronavirus that has shuttered retail outlets and silenced production facilities.

The coronavirus has struck at a time when Apple’s iPhone sales in China were rebounding in a country considered right now one of the world’s most competitive smartphone markets.

All 42 Apple Stores in China remain closed until further notice. Apple’s main iPhone assembler Foxconn reopened one production facility Monday but saw only 10 percent of its workforce report for duty.

The coronavirus has killed more than 900 people and infected some 40,000 people, mostly in China. The Chinese government had extended the Lunar New Year and ordered quarantines to help contain the virus but the numbers of infected continue to climb.

Apple is not the only smartphone maker impacted by the health crisis. China’s smartphone, manufacturers, like Huawei, Xiaomi and Oppo are scheduled to unveil new flagship devices this quarter as the country prepares for a big 5G rollout.

Huawei told Reuters its plants are “running normally” but declined to specify further.

The research firm Canalys said it expects smartphone sales to be half of what they were this time last year. IDC forecasts a 30 percent drop.

“Vendors’ planned product launched will be canceled or delayed, given that large public events are not allowed in China,” Canalys said in an investor’s note obtained by Reuters. “It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments.”

Apple’s first 5G offering is reportedly scheduled for fall, however, the tech giant is believed to have new products set for production this quarter, including a new budget-friendly iPhone.

Source: Reuters