Smartphone production may fall by 40% in the first half of 2020

Smartphone production will significantly reduce due to the Covid-19 outbreak that continues to impact global markets. A new report suggests that smartphone production in India will tumble by 35-40% in the first half (H1) of this year.

The report by CyberMedia Research (CMR) further highlights that the shipments will rise 15% year-on-year (YoY) basis for H2 2020. Prabhu Ram, Head of Industry Intelligence Group at CMR said, “Our current India smartphone market assessment points to a bleak picture, with some promise in H2. We anticipate a significant drop of around 20 per cent YoY in smartphone shipments in Q1. here will be a full-blown impact in Q2 2020, with a sharp decline of around 28 per cent YoY.”

Covid-19 pandemic has created a large impact on both supply and demand. Original Equipment Manufacturers (OEMs) could tide over the initial wave of Coronavirus crisis in January and February with adequate components supplies, the closure of smartphone factories in India has dented recovery prospects for H1.

The closure of smartphone factories in India has already impacted the recovery prospect for H1. Companies including Samsung, Apple, Xiaomi, Vivo. Realme, Oppo, and others have temporarily shut down their production amid 21-day lockdown announced by the Indian government.

The Coronavirus scare has also impacted the demand from offline channels. Sales are down by 55 to 60 precent. Referring to China’s experience, the future of sales picking up in India is uncertain.

The pandemic will force smartphone brands to reflect and realign market strategies. It is expected that the market will perform better in the festive season and beyond. Consumers would be seeking to upgrade their value for money smartphones in the H2.