Impact of COVID-19 on the Smartphone Market
The smartphone industry is one of the fastest-growing industries across the globe. However, it has registered a drastic fall in demand during the COVID-19 crisis. Smartphone manufacturers are facing production disruptions, mainly due to the lockdowns enforced by government authorities to minimize the risk of infections and the spread of the disease. Hence, the closure of retail outlets that play a vital role in boosting offline sales of smartphones across major contributing markets has impacted the industry severely. Additionally, the production and supply of essential components used in the assembly of smartphones have fallen drastically due to disrupted supply chains and rising prices. On the other hand, online distribution channels have reported an increase in sales by over 5% in India, mainly due to hygiene practices adopted by the e-commerce platforms at the time of delivery. In contrast, offline sales are expected to record a reduction in the demand by 20-30% in the current year owing to the complete standstill of the market, rising inventory levels, and other economic impacts during the lockdown.
Smartphone Sales (Units in Thousand)
Smartphones are an integral part of people’s daily lives. They play an extremely vital role in contact tracing and other effective measures adopted by the healthcare sector and the government agencies during the current crisis. Also, the increasing adoption of AI in smartphone devices has boosted product demand. Also, smartphone manufacturers are adopting new practices to enhancing their production capacities post the COVID-19 pandemic while increasing marketing initiatives such as maintaining smartphone stocks at nearby stores displayed on the official websites, and so on. Apart from these, the launch of 5G services by telecom operators is expected to boost the growth of the smartphone industry soon after the COVID-19 pandemic subsides.
Source: IDC, June-2020