Smartphone production may drop by 30% in first half of 2020


iPhone 5G
COVID-19 may hurt the rollout of 5G devices.
Photo: Ed Hardy/Cult of Mac

Global smartphone production could fall as much as 30% during the first half of 2020, according to analysts at ABI Research.

The advisory firm’s latest report claims that while analysts previously hoped the arrival of 5G smartphones would bring a big sales boost at the end of the year, that’s unlikely to happen now that the coronavirus outbreak has paused device production and plunged the global economy into a recession.

“There will be an adverse effect on 5G devices,” writes David McQueen, 5G devices research director at ABI Research. “No sooner had 5G smartphones started to gain some traction and break into the market in significant numbers, than the outbreak will now trigger a suppression of its near-term growth, pushing out the development and introduction of affordable 5G phones.”

Will coronavirus hit 5G iPhone?

Industry watchers still expect Apple to release a 5G iPhone this fall. Customers might not rush out to scoop one up at launch, though. Widespread layoffs left millions of workers around the world unemployed as countries enact shelter-in-place mandates.

Foxconn, Apple’s top iPhone assembler, said this week that it hired enough workers to handle the seasonal increase in production for the 2020 iPhone launch. All of the company’s major factories in mainland China are finally ramping up to full capacity following last month’s complete shutdown.

“With such a large proportion of the world’s mobile device market relying on China for manufacturing and component supply…it has become clear that many in the chain were woefully unprepared to react quickly,” McQueen points out.

ABI Research thinks the COVID-19 pandemic will come under control by the end of 2020. However, it could take longer than that for consumer confidence to recover.