ABI Research is predicting that global smartphone production could drop as much as 30 percent in the first half of the year due to the COVID-19 pandemic. The downturn largely reflects the considerable disruption to production lines and supply chains in China, which was the first country to be hit by the coronavirus. China also happens to be one of the world’s leading manufacturers of mobile devices.
“The ripples from China will be felt globally,” said ABI 5G Devices Research Director David McQueen. “It has become clear that many in the chain were woefully unprepared to react quickly.”
According to McQueen, the coronavirus will have a particularly pronounced impact on the burgeoning 5G market. Affordable 5G smartphones were expected to be a major driver of early adoption, but the production of those phones (including an anticipated 5G iPhone) has now been delayed. That will suppress the short term development of the 5G ecosystem and lead to more production and shipping delays later in the year.
The ABI report goes on to suggest that the pandemic could shake consumer confidence and limit the demand for new devices once public health experts find a way to control the outbreak. If that proves to be the case, it would lead to lower sales and lengthen the recovery timeline for the entire mobile industry.
While COVID-19 has already had a dramatic impact on the conference schedule, the ABI report is a reminder that businesses are just beginning to get a glimpse at the long-term repercussions. The virus has caused as much social disruption as logistical disruption. People will eventually be cleared to return to work, but it will still be some time before business as usual is restored.
However, it is worth noting that the mobile industry is indeed expected to recover. The GSMA has reported that China will move forward with its 5G goals despite the recent interruptions.
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