Technology Jan 12

Smartphone shipments dip as Covid cuts China handset demand 

Domestic deliveries fell by 20.4% in 2020 with the coronavirus crisis taking much of the blame – but consumers are now waiting longer to upgrade too 

by Josh Horwitz
Smartphone shipments dip as Covid cuts China handset demand 
In the first half of 2020, Oppo, Vivo, and Xiaomi Corp each saw steep shipment declines. Photo: Reuters

Domestic smartphone shipments in China in 2020 fell 20.4% from the previous year, government data released on Monday showed, as the number of handsets delivered to consumers dropped to 296 million from 372 million in 2019.   

The figures from the China Academy of Information and Communications (CAICT), a state-backed think tank, reflected both the impact of the coronavirus crisis on the supply chain and demand, and the ongoing trend for consumers keep their phones for longer before upgrading to a new model.

In 2019, shipments of smartphones had declined 4% from the previous year, according to CAICT data.

Handset vendors had entered 2020 hoping the year would bring renewed sales as consumers purchased new phones compatible with China's rapidly-expanding 5G networks.

Read more: China telecoms lose billions after MSCI, FTSE Russell confirm cuts

But, in the first half of the year, domestic brands Oppo, Vivo, and Xiaomi Corp each saw steep shipment declines while Huawei, the leading Chinese brand at the high-end, continued to grow market share.

In the latter half, Huawei sales slowed as trade restrictions imposed by Washington on the company took effect, squeezing its supply of critical components. Oppo, Vivo, and Xiaomi have ramped up production in hopes of capturing that share.

Apple released its first 5G-enabled handsets in China last autumn and analysts remain bullish on the device’s reception as loyal iPhone owners who once delayed upgrading now buy new phones.

Phone makers shipped a total of 25.2 million smartphones to consumers in China in the month of December, marking a 12.8% year-on-year decline, according to CAICT.

  • Reuters

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