Global smartphone sales tumbled 14% in February


GLOBAL smartphone sales declined 14% in February as demand was pummelled by the worsening Covid-19 outbreak in most parts of the world, according to Counterpoint Technology Market Research.

China, the initial epicentre of the epidemic, saw a 38% decline, the biggest single-month decline in the industry’s history.

VP and research director Peter Richardson said the impact of the global pandemic on the technology industry is unprecedented and as a result, the global February smartphone sales showed weakness.

“Overall, global smartphone sales in February showed weakness in many markets as consumers became cautious. But with the growth of online channels, we saw sales shifting from offline to online.

“Offline sales in China fell more than 50% during February. But this fall was partially offset with stronger online sales, so the overall drop at 38% was not so severe,” he said in a statement.

According to Counterpoint’s report, sell-in shipments, which represent the supply of smartphones, were relatively weaker, but February is a traditional low period for production, especially if it coincides with the Chinese New Year as was the case this year.

“Compared to a year ago, sell-in shipments fell 18%, though again, less bad than the industry feared,” Richardson said.

He also highlighted that the global smartphone market is largely a replacement market, meaning that smartphones are a discretionary purchase.

“Nevertheless, they are now seen as a vital part of daily life — especially so for those enduring extended periods of isolation or remote working.

“So, while people may delay purchasing due to the coronavirus pandemic, especially in the early part of the crisis when disruption and uncertainty are both high, they will still replace their smartphones at some point,” he added.

In terms of the smartphone demand-supply landscape and outlook, Richardson concluded that sales will not be entirely lost — just delayed.

Counterpoint’s senior analyst Jene Park said the worst is far from over.

“While China and South Korea are gradually recovering, the worst is far from over for many other parts of the world.

“The coronavirus pandemic is unprecedented in nature and scale, but there are historical parallels we can learn from, and these give us confidence that the mobile communications sector can ride out this storm without too much damage in the longer term,” he said.

To recall, the outbreak had led Apple Inc and other smartphone makers to shut their China stores in February.

Apple was one of the most affected Western companies as it makes nearly all its products in China and sells about a fifth of them there.

The Chinese factories that make all of the iPhones, iPads and MacBooks were closed for weeks in January itself.

In terms of the competitive landscape, Counterpoint’s report shows that the demand for Samsung Electronics Co Ltd’s smartphones remained stable due to the minimum exposure to the Chinese supply chain and China market demand, thus capturing a 22% global smartphone market share in terms of sales volumes.

Apple felt some impact from the supply side during the month, both in China in early February and outside of China in the latter half of the month, which affected its sales performance.

However, Huawei Technologies Co Ltd performed above expectations, selling more than 12 million smartphones during February, with just a 1% drop in global market share.

The performance is attributed to Huawei’s maximum exposure to China from both supply and demand perspectives.