The very first quarter of 2020 was a record low for the mobile industry. Although certain recent projects, such as cloud computing, have succeeded amid the coronavirus disease outbreak, the telecommunications industry has not. While Covid-19 started to expand around the globe, it has a significant economic impact on smartphone firms, ultimately effecting each and every single government of the world.
Counterpoint Research records a 13 percent year-over-year decline in the smartphone industry for Q1, the fastest downturn in history. This sudden decline is the result of several factors, from the increasing demand for manufacturing problems. While not all challenging environment is consistent, most organizations are confronted with similar issues.
- Production Declining
Mobile phone revenues are not the only dropping figures in the telecom industry right now. In light of the pandemic, smartphone manufacturers have scaled back production. Decreasing revenues and outages over health concerns have severely hindered mobile phone manufacturing.
As per Korean news outlets, Samsung reduced its monthly output to roughly 10 million units in April, less than half of its normal monthly output. When factories in Brazil and India shut down, they would not be able to sustain regular output rates even though they were financially sustainable.
- Changing market share for manufacturers
The data in the Counterpoint study suggests some changes in the market share of smartphones. All phone merchants and manufacturing companies are facing economic drought, but not all of them are experiencing it in the same way. At the start of 2019, Samsung had a share of the market of 21 percent, which declined to 20 percent in Q1 of 2020.
While Samsung’s share is fallen, Huawei remained the same, and Apple increased by 2 percent. Both of these businesses record fewer deliveries between 2019 and 2020, but this reduction is exaggerated between them. While the epidemic persists, there could be even more major shifts in the mobile industry position.
- The growing use of smartphone
Despite these declining manufacturing and distribution statistics, smartphone usage is at a better elevation than usual. Many business owners now rely on social networking, and people in quarantine spend more time on social media. In the wake of the pandemic, electronics have become more popular than ever before.
This increased use will result in some minor financial benefits for smartphone companies. Sales of apps and accessories could likely increase, and cellular network operators will benefit enormously from increasing data consumption. However, these gains do not represent enough profit to reduce the decreasing sides of the industry.
Falling New Phones Demand
The most significant of all the effects of Covid-19 on the business sector is the declining demand for new smartphones. Not that the epidemic has made smartphones less valuable, but the resulting slump is shifting market preferences. In the situation of financial hardship, people are unlikely to purchase a new phone until they need one.
In the United States alone, joblessness has managed to reach 14.7%, the highest since the economic crisis. With more than 20 million people without even a precise value, fewer customers will take into account an upgrade they do not need. Even those with job security may be able to hold on to such acquisitions in the light of growing market instability.