Coronavirus less likely to hurt Samsung than Apple

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Samsung Galaxy S20 isn’t made in China
Samsung depends more on Vietnam for production than China, so the Galaxy S20 series probably won’t be in short supply.
Photo: Samsung

Samsung is less exposed to the negative effects of the COVID-19 coronavirus outbreak in China than many of its rivals, including Apple.

But the opposite is true of Huawei, a China-based smartphone-maker likely getting hurt more than Apple.

Coronavirus hits some phone-makers more than others

Yesterday, Apple said the COVID-19 outbreak in China could make the company fall short of revenue goals for the current quarter. Samsung hasn’t made any such announcement, and it isn’t likely to, points out Reuters.

Apple’s difficulties stem partially from its reliance on Chinese factories to produce iPhones, Macs and other products. Many are operating at reduced capacity as workers stay home to avoid catching the deadly disease.

But half of Samsung’s smartphones are produced in Vietnam, far from the epicenter of the COVID-19 outbreak.

Huawei is based in China and is likely in a worse situation than Apple, which is shifting some production to other countries. These are the three top phone-makers globally. Last quarter, Samsung came out on top, followed by Apple then Huawei.

Samsung sales in China can’t get much worse

China is also a major market for Apple products. But the company warned yesterday that “all of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic.” This is cutting into sales.

Samsung has less to worry about because it isn’t a major player in China. It isn’t even in the top six phone-makers in that market, according to Counterpoint Research.

Apple, on the other hand, commanded 6% of the Chinese smartphone market in the third quarter of last year, the most recent for which figures are available.

Huawei dominates Chinese phone sales, capturing a 40% share in Q32019. And the coronavirus is expected to lower demand. “Huawei group is likely to suffer as China has accounted for over 60% of its total smartphones sales,” said Flora Tang, research analyst at Counterpoint.