According to new research, mobile phone sales will fall to their lowest level in a decade due to the impact of the coronavirus. CCS Insight analysts predict the market will slow by 13% as the crisis affects normal economic activity, the supply chain and consumer demand. The effects of government restrictions will be particularly marked in the second quarter, when a 29% drop in sales is expected.
Drop in smartphone sales
Signs of recovery have been observed in China. But observers say any return to normal sales rates and production levels will be offset by problems in other markets and manufacturing centers. In total, almost a quarter of a billion fewer devices will be sold in 2020 compared to 2019, with the total number reaching 1,57 billion. "The data from China gives us a good indication of the effect lockdowns and consumer uncertainty are having on phone demand," said Marina Koytcheva, vice president of forecasting at CCS Insight. "In January and February 2020, sales volume fell 44% from the same period in 2019. Initial data from other countries that have introduced strict measures to combat the pandemic suggest similar declines. "Some companies are now facing the inability to meet demand for certain products. This is particularly painful because they only have a slim chance before people and businesses go into strict money-saving mode. In the wake of the current situation, we expect the biggest negative impact on sales will come from weak demand." However, it is believed that delayed purchases and the spread of 5G will see a significant recovery from 2021. According to CCS, sales will increase by 12% in 2021, surpassing 4% in 2019, while in 2022, the growth rate will be 13%. This will lead to sales exceeding 2 billion. By then, 5G coverage will have increased significantly and carriers will have launched more affordable phones. Sales of 5G-compatible phones will reach 210 million units and by 2024 will account for 58% of all devices sold that year.