Worst ever quarter in the history of global smartphone shipments

Martyn Warwick
By Martyn Warwick

May 1, 2020

© Flickr/cc-licence/Nicolas Mirguet

© Flickr/cc-licence/Nicolas Mirguet

  • Research reports tell Q1 2020 like it is - a disaster
  • "The worst quarterly performance of all time"
  • Samsung the best placed with shipments down a mere 17 per cent
  • We already know that Q2 will be a lot worse

A slew of new reports indicate that worldwide sales of smartphones were down by anywhere between 16 and 18 per cent in Q1 as the corona virus turned the world upside down and the industry inside out. Given that the UK government's Circumlocution Office has led the way in the art of creative obfuscation and minimised the lack of  availability of personal protection equipment for front line medical staff by simple expedient of counting pairs of surgical gloves as two individual components, thus simultaneously "doubling" the number available and outraging the entire British population, there can be no quibbling over the fact that the new figures from the likes of Omdia and Strategy Analytics are the worst the smartphone sector has ever seen, for both left-hand and right-hand models. 

Because of Covid-19 the sector has been hit by manufacturing shutdowns (starting with China), indefinitely postponed product launches (the cancellation of Mobile World Congress in Barcelona being a major factor here) and rock-bottom consumer spending which brought demand to a sudden halt. The result, as calculated by the Omdia Smartphone Intelligence Service, has been that Q1 2020 shipments were by down 16.8 per cent, falling from the 329.9 million units achieved in Q1 last year to 274.4 million this year. All smartphone brands were hit, from the most expensive and prestigious on down, as more than of 90 per cent of OEMs took an unprecedented hammering.

Samsung came out "best", if a 17 per cent collapse in shipments can be so described. The South Korean manufacturer moved 58.9 million handsets while Huawei slipped back by18 per cent to 49 million units as compared to the 59.1 million recorded for the same quarter last year. It was Samsung's lowest quarterly smartphone shipments for eight years. Apple too wasn't immune to the effects of the pandemic. iPhones shipped were 38.5 million, 5.3 million below Q1, 2019. That equates to a 12.0 per cent fall in what, traditionally, is Apple's weakest trading quarter of the year. However, the company did gain some market share, growing by one percentage point from 13 to 14.

Further down the ranks, two second-tier Chinese manufacturers also suffered. Xiaomi shipments slipped by 8.2 per cent and were down from 25.3 million compared to the 27.5 million recorded in Q1 last year, while OPPO accounted for 20.4 million units, down from 25.2 million last year, a decline of 19.2 per cent. However, Beijing-based Xiaomi with a 10 per cent global market share (up from 8 per cent a year ago) is currently a major player in the Indian smartphone market and is likely to continue to be so for the foreseeable future despite determined assaults on its position on its position by Apple and Realme.

OPPO, meanwhile retained the 8 per cent share it achieved last year, largely because of its continuing expansion into, and growing popularity across, European markets. However, it has little presence in or impact on the US market and given the Trump administration's growing antipathy toward the Chinese regime and suspicion about what might be concealed in comms equipment from Chinese manufacturers, it will be very difficult for it to carve out a bigger share of the pie.

On the plus side, another Chinese OEM, Shenzhen-headquartered Realme, actually bucked the global trend and increased its shipments, and not by just a few points. It shifted 6.1 million units, a massive 88 per cent increase over the 3.2 million achieved in the same quarter last year, mainly on the back of it's rapidly growing presence in India.

At the other end of the scale, shipments of Motorola smartphones fell by 35.4 per cent to just 5.5 million units, despite all the hooh-haah and hype surrounding the launch of its 'new' RAZR handset with its foldable screen. And it's worse for LG where shipments fell by a massive 37.4 per cent to just 5.4 million units, down from 8.6 million units a year ago.

It'll get a lot worse before it starts to get better

So what for the future? Do we have any idea when the world and the industry will claw its way up from the pits of hell and how bloody but unbowed we, and it, might be? Well, according to Omdia, the smartphone market should (and should is the operative word here) "start to recover in some countries and regions in the second half of the year." 

The report adds, "The smartphone market will face major struggles in the first half of 2020 as different countries experience the initial shock and recovery periods at different times. That’s why OEMs are more afraid of second-quarter sales results, However, fears over a prolonged closure of essential production, supply chain and logistics operations in China have been alleviated, as signs point to economic activity ramping up quickly in the country."

So, although there may be a glimmer of light at the end of the tunnel as far as the supply side is concerned, the demand side is still in freefall. The Omdia report points out that, “Although handsets can be produced at nearly normal levels, the markets for these handsets are mostly in some state of shutdown." 

The consensus amongst analysts is that the global smartphone market will contract by more than 13 per cent over the course of 2020 (down to 1.20 billion units from the 1.39 billion shipped over 2019) with some sort of a ragged and patchy recovery possible, but by no means assured, over the course of the second half. 

Meanwhile, Strategy Analytics doesn't pull its punches in its latest report. It says" This is the smartphone industry’s worst quarterly performance of all time." And so it is… and Q2 will be much, much worse.



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