Samsung said in a press release that the growing demand for 5G devices will not succeed in addressing the global smartphone market, which, like most other industries, is facing the crisis of a new coronavirus pandemic. It is still expanding around the world, with the number of infected and fatalities increasing day by day, which of course only worsens the situation in the mobile market.
Samsung's mobile division chief Koh said on Wednesday that Skype's shareholders had assembled through a Skype conference that the world's largest smartphone maker was expecting increased smartphone demand before the virus erupted, but there are now clear signs of a shutdown demand. Koh, however, announced that demand for 5G devices is expected to grow by the end of this year.
To one extent or another, the pandemic is present in every country in the world, and South Korea, where Samsung is also headquartered, has only been the focus of the spread of the virus for several weeks alongside China. It has now reached all countries in Europe, North America and the rest of the continent. This means big problems for Samsung, as they have been forced to reorganize work, ban business trips, and customers are avoiding public areas around the world where movement is still allowed.
Samsung's press release came just days after Apple announced that it was closing all physical stores outside of China, South Korea and Thailand. Apple announced a short time ago that it would not meet the set financial targets in the first quarter, as they were forced to close stores in China right from the start, and their main manufacturer, Foxconn, had to close factories in the country. Apple's stores are already operating in China, as are factories, and fear is still present in people. Samsung, after one employee received a positive test result, closed one of its factories in South Korea.
Despite the fact that Appla and Samsung factories are slowly returning to normal, smartphone manufacturers are facing a difficult period as device sales are already falling. Below, we outline the current situation in the smartphone market, and Strategy Analytics predicts that the global smartphone market is expected to decline by 10% by the end of 2020. Main reason? Fear and paralysis caused by coronavirus. “There will be no winners in this battle. All major smartphone makers will face declining sales,” Strategy Analytics announced.
Focusing on Samsung may not be all that black for the company. Samsung is also one of the largest manufacturers of processors. This is a market that has been in a bit of a crisis in recent years due to low prices and not the best organized supply chain of components. Samsung Electronics CEO Kim Ki-nam said they expect an increase in demand for processors, thanks to the growth of the artificial intelligence, autonomous vehicles and 5G phones and networks market.
Coronavirus: The collapse of smartphone sales
Smartphone sales have experienced the biggest collapse in sales since the invention of the smartphone. Strategy analyst reports that sales were down 38% from February last year. The author of the study, Linda Sui, says that the outbreak of a new coronavirus in China has far more impact than people might imagine. Experts around the world are writing about these effects, and unfortunately, the forecasts are not the most optimistic.
“Some factories in Asia were not able to produce smartphones, while not many customers opted to visit physical stores,” Sui wrote. The fact is that online commerce is booming at the moment, but at the same time, the problem is that companies are unable to provide sufficient supplies due to factories located around the world. supply chains are interrupted.
The report said the number of phones sold in February had dropped from 99.2 million in 2019 to 61.8 million this February. We don't need to be an expert to feel the difference, right? February should be an important month for the mobile industry, as this month should be the biggest event of the Mobile World Congress, where manufacturers usually introduce new phones. In addition, countless other major and minor events have been canceled, all of which affect the entire industry. People are slowly getting ready for the economic downturn, which means that now is not the time for luxury purchases like the phone.
Samsung unveiled its new flagship S20 phone in February, and according to the latest data, sales are slow. At the same time, Apple reported that they would not meet the set financial targets, but warned that the supply of iPhones worldwide would be limited and in some cases completely interrupted.
“February 2020 is the month we see the biggest drop in smartphone sales in the history of the smartphone market,” says Neil Mawston, CEO of Strategy Analytics. “All together, both supply and demand, began to fall in China, the matter spread across Asia, which in turn stalled or stopped. at least slowed down the whole world. This is definitely a time that the industry will want to forget as soon as possible, “Strategy Analytics wrote.
It is also important to note that Strategy Analytics predicts that smart-calf sales will be poor in March as the virus has spread across the US and across Europe. The numbers are not talked about at the moment, but the current crisis could certainly do even more damage.
Hundreds of millions of potential customers are currently in isolation, which of course means that it doesn't even occur to them to go to physical stores. Strategy Analytics predicts that manufacturers could offer discounts to drive sales.
Despite the economic crisis in sight and the financial targets not being met and supply problems, Apple announced two new products this week – a new iPad Pro with laser scanning technology and a new MacBook Air. But he did it through a press release, not a cumbersome event, as Apple would have expected. Analysts do not remember when Apple last announced its new products in such a quiet manner.