#Coronavirus Bites Smartphones As Sales Drop 38%; Samsung, Vivo, Oppo Shuts Down Production

Earlier this month, Xiaomi, OPPO and Qualcomm, the leading mobile chipset maker in the world, said that the coronavirus pandemic poses a potential threat to the global smartphone industry in terms of new launches, product shipments and production. 

The Covid-19 spread in India has caused many businesses to shut down and brought the economy of many countries including India to a standstill. Oppo, Vivo and Samsung have stopped production at their Greater Noida plants as the government announced a lockdown to curb the spread of the virus.

On the other hand, Smart TVs by brands like Xiaomi, Samsung, TCL, Vu and others, the overall TV market in India saw an increase in its shipments by 15% (year-on-year) in 2019.

Read to find out more…

Smartphone Factories Shut Amidst the Lockdown till Further Notice!

The central and state governments decided to lock down 75 districts across the country where Covid-19 cases have been reported to contain the spread of the virus.

According to reports by ET Telecom, the smartphone companies are to meet the Uttar Pradesh government officials tonight to discuss the ‘future course of action.’ Quoting a person familiar with the matter, the report said, “The factories are shut till March 25…basis discussions with UP government officials, both Oppo and Vivo will take future steps.” 

Vivo has already asked all its non-factory workers to work from home from March 23. Whereas the telecom firms Ericsson and Nokia are still continuing with production work at their Chennai and Pune factories.

Samsung’s Noida facility is the world’s largest mobile phone factory set up in 2018. Samsung India announced that its operations at this production facility in India has been suspended till further notice. 

A Samsung spokesperson said in a statement, “At Samsung, the health and safety of our employees is our highest priority. As a measure to safeguard our employees and their families against Covid-19 and in compliance with directives from the Government, we have decided to currently suspend our manufacturing operations in Noida and have asked our employees at our sales, marketing and R&D offices across India to work from home.” 

The Largest Fall in Smartphones Sales Witnessed in February 2020!

 According to a new report from Strategy Analytics, global smartphone shipments dropped 38% annually in February to 61.8 million devices. Linda Sui, analyst at Strategy Analytics said in an email, “The fall was observed across all price bands, not just expensive or mass market models.”

The report stated that the shipments to distributors plummeted in China and subsided across Asia as work shut down and people stayed at home.

According to the publication, the outbreak affected the supply and demand cycle. Factories in Asia were unable to manufacture phones as normal, because of mandatory government shutdowns and issues securing key components from the supply chain. Whereas people who are self-isolating or under an order to stay at home were unlikely to go to retail stores or shop for new devices, thus affecting the demand for new devices. 

Yiwen Wu, a senior analyst at Strategy Analytics said in a statement,“Despite tentative signs of recovery in China, we expect global smartphone shipments overall to remain weak throughout March, 2020.” 

Smart TV Sales Increase!

According to reports, Smart TVs saw its highest-ever shipment of 15 million units in 2019. Samsung was the leader in the overall TV segment whereas Xiaomi topped the charts in the smart TV segment with 40% (year-on-year) growth in 2019. 

Samsung recorded a 6% (year-on-year) growth, mostly coming from its smart TV sector that saw 5% growth. LED TVs still account for more than 90% of theIndian market while OLED and QLED TV the rest. Non-smart TV grew by 7% (year-on-year) in 2019.

According to the latest research from Counterpoint’s ‘TV Tracker Service’, the growth is mainly driven by budget smart TVs with 32-inch TVs leading the segment and penetrating sub-$150 price bands. 

Senior Analyst Karn Chauhan said, “Affordability and value for money are the key growth drivers. The new crop of brands such as Xiaomi, TCL and others are tapping their existing relationships with e-commerce channels such as Flipkart, Amazon, etc to successfully distribute the TVs affordably with a direct-to-consumer model.”

The relatively affordable offerings by the smart TV brands have been influencing the smartphone users to purchase large-sized smart TVs. The report noted, this strategy has helped brands such as Xiaomi and TCL to grow its shipment volumes by 40% and 110% (year-on-year), respectively in 2019.