What you need to know
- Research suggests smartphone production could be about to fall by up to 16.5%.
- TrendForce says that it only expects 287 million phones to be produced in the June quarter.
- That's despite signs that supply chains and manufacturing are starting to resume production.
Research from TrendForce suggests that global smartphone production may fall by up to 16.5% in the June quarter.
As reported by Reuters:
Global smartphone production is expected to slump a record 16.5% to 287 million phones in the June quarter from a year earlier as the coronavirus pandemic muzzles demand, TrendForce said here despite supply chains resuming after weeks of shutdown. Samsung Electronics (005930.KS) and Apple Inc (AAPL.O) will retain their first and third spots on the leaderboard, but are both expected to lose market share to Chinese rivals, the market research firm said on Thursday.
That follows a 10% drop in output worldwide in the March quarter when the outbreak spread and peaked in China before sweeping through Europe and the United States.
TrendForce has also cut its annual output forecast by 11.3% compared to 2019 and stated:
"The pandemic is now making its effects felt on the demand side of the smartphone market by tanking major economies worldwide"
TrendForce seems to think that both Apple and Samsung's placings in the smartphone market will not be affected by recent events, but that we could see them losing market share to its Chinese rivals, which it says are "exerting continuous pressure on Samsung's presence in the Southeast Asian and Indian markets."
Usually, a downturn in production of that magnitude might lead to shortages of devices for consumers who want to purchase them. However given the current economic climate and global lockdown measures which have forced high-street retail to close down temporarily, it's certainly very possible that supply and demand may be falling in equal measure, meaning we might not really see the real effects of shortages reflected in device availability. Apple plans to announce its Q1 earnings on Thursday, April 30, which should be a good indicator as to how the company is coping.