Coronavirus jitters to hit smartphone sales; shipments in China to drop this much in Jan-Mar

China, which is the world’s largest smartphone market, is going to witness a setback due to coronavirus outbreak as the mobile phone shipments are likely to drop by as much as 30% in Q1. “China’s smartphone shipments to drop more than 30% year-on-year in 2020Q1… The Wuhan coronavirus could have a Black Swan effect on the market in the first half of 2020,” market research company IDC said in a report this week. The coronavirus has killed over 1,000 people so far, according to China’s National Health Commission. China’s Wuhan province is the epicentre of the deadly virus’ outbreak.

Chinese brand phones also dominate India’s phone market with more than one out of two smartphone selling in India comes from China’s stable — Vivo, Oppo, Xiaomi and RealMe. These four brands combined control over 60% of India’s smartphone market, leaving South Korean brand Samsung and US-based Apple far behind, according to Counterpoint’s Market Monitor service.

Meanwhile, the spread of the deadly virus across the globe also hit China’s Lunar New Year’s shopping season in late January and is likely to have an impact on the sales numbers in the following months as well, IDC said. Owing to the coronavirus spread, China will witness “uncertainty in product launch plans, the supply chain, and distribution channels, in the mid and long term,” the report added.

The Wuhan virus outbreak could have a considerable impact on China’s full year economic growth with it expected to witness a fall by as much as 1 percentage point in 2020, a senior member of a Chinese government think tank said, Reuters reported. The said official also compared the ongoing pandemic with the SARS epidemic of 2003. At that time, China’s growth had slipped by about 2 percentage points in a single quarter.

“The impact of this epidemic on the economy in the first quarter is expected to be comparable,” he said, adding that “At present, according to different scenario assumptions, researchers expect the negative impact of the epidemic on full-year GDP growth to be in the range of 0.2% to 1%.