Initial impact of coronavirus on the smartphone industry is clear but there’s more to come

The coronavirus outbreak is moving across the world like an avalanche. Factories shutting down turned to stores closing and eventually whole cities going into lock-down. It was inevitable that this will impact the economy but now we have some more data about how bad the drop actually was.

The research agency Counterpoint has shared some data with Reuters about how bad February was for the smartphone industry. The verdict? A 14% drop in sales globally. While that probably isn’t as bad as you expected, keep in mind that the data is for February when most of the world was still doing business as usual. If we look only at China, the drop there was a lot more significant -- 38% lower compared to February 2019.

March will likely be significantly worse as now in most of Europe, the US and India, retail stores are closed down. While e-commerce is still going strong, people’s income is taking a hit due to the countermeasures and most of them will likely avoid needless expenses like upgrading to a new phone.

Even if there is demand, smartphone manufacturers might be unable to meet it. Factories that assemble smartphones in China are starting to ramp up production but now part suppliers in other countries are temporarily closing down shop. Needless to say, if even one component is missing, complete units can’t be assembled and production grinds to a halt.

The situation is highly unpredictable and rumors are changing narratives day by day. Q1 reports will start coming out in early April and if one thing is certain, it’s that they won’t bring good news.