Covid-19: Global smartphone sales take a tumble in Q1 2020

Leading analyst Gartner attributes 20% year-on-year decline in device sales to effect of coronavirus pandemic, with leading brands showing sharp falls

With industry leaders such as Samsung, Huawei and Oppo recording double-digit declines, global sales of smartphones dropped by 20.2% in the first quarter of 2020, according to research from Gartner.

The technology analyst’s study, Market share: PCs, ultramobiles and mobile phones, all countries, 1Q20 update, revealed that lockdowns and stay-at-home orders, combined with the economic uncertainty brought on by the Covid-19 pandemic, caused demand for smartphones to collapse as consumers stopped spending on non-essential products in the first quarter.

The study found that all of the top five smartphone suppliers recorded a decline in the first quarter of 2020, except for Xiaomi.

Even though Samsung’s smartphone sales declined by 22.7% in the first quarter of 2020, the company still maintained the number one spot, with 18.5% market share. Samsung built more inventory in the channel in preparation of new smartphone launches, but its inefficient online channel, combined with the lockdown, led to much weaker sales to users than into the channel.

“The coronavirus pandemic caused the global smartphone market to experience its worst decline ever,” noted Anshul Gupta, senior research analyst at Gartner, analysing the trends revealed in the study.

“Most of the leading Chinese manufacturers and Apple were severely impacted by the temporary closures of their factories in China and reduced consumer spending due to the global shelter-in-place. Covid-19 negatively impacted Samsung’s smartphone sales during the quarter. However, the decline could have been much worse – its limited presence in China and the location of its manufacturing facilities outside of China prevented a steeper fall,” added Gupta.

“The coronavirus pandemic caused the global smartphone market to experience its worst decline ever”
Anshul Gupta, Gartner

Placing focus on Huawei, Gartner found that the Chinese company recorded the worst performance among the top five global smartphone suppliers in the first quarter of 2020. Sales of smartphones fell to 42.5 million units, a decline of 27.3% year over year. Even with its first ever decline in smartphone sales, Huawei held on to the number two position, with 14.2% market share.

“Huawei will have a challenging year,” said Gupta. “It has developed the Huawei Mobile Service (HMS) ecosystem, but with the lack of popular Google apps and Google Play store, Huawei is unlikely to attract new smartphone buyers in international markets.”

Turning to Apple, Gartner noted that although the US supplier was not as dependent on China as Huawei, Oppo or Vivo, it faced supply constraints and store closures which negatively impacted iPhone sales in the first quarter of 2020. But the impact of the pandemic on the US supplier was less significant than for the other top suppliers. Apple’s iPhone sales declined by 8.2%, totalling 41 million units in the first quarter of 2020.

“Apple had a strong start to the year thanks to its new product line-up that saw strong momentum globally. If Covid-19 did not happen, the vendor would have likely seen its iPhone sales reach record level in the quarter. Supply chain disruptions and declining consumer spending put a halt to this positive trend in February,” said Annette Zimmermann, research vice-president at Gartner. “Apple’s ability to serve clients via its online stores and its production returning to near normal levels at the end of March helped recover some of the early positive momentum.”

Oppo’s smartphone sales fell by 19.1% in the first quarter of 2020. Oppo’s offline distribution, which the report noted as one of its strengths, suffered as the work-from-home trend forced consumers and businesses to purchase products online. To grow its sales and market share, Gartner said it was paramount that Oppo strengthened its online sales channel.

Gartner added that strong sales of Redmi devices in international markets and an aggressive online channel focus led Xiaomi to achieve better-than-expected sales.

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