Experts fear that the global coronavirus pandemic means smartphone companies will struggle through the rest of 2020, as consumers hold onto older devices for longer periods of time.
According to DigiTimes, global smartphone shipments will contract by around 15% this year to 1.15 billion units, and Samsung, Apple, and Huawei have all cut their shipment forecasts.
Back in February, Apple confirmed that guidance for its March quarter would fall short due to the ongoing virus. Back in January, the company predicted sales of between $63 and $67 billion in the quarter, but that figure was understandably unachievable amidst the pandemic.
As well as the coronavirus changing consumer behavior, Apple has blamed lower demand in China and challenges with supply chains as the main issues for falling demand for iPhones.
The company’s key assembler, Foxconn, has cut its revenue outlook for the rest of the year as it battles with quarantines and working restrictions in China, as the country begins to reopen after two and a half months of government-imposed lockdowns which cut all output.
A source told DigiTimes that Apple has cut its orders for new iPhone 11 models in the second and third quarters of the year due to the crisis, and a separate leak suggests that Apple is planning to order fewer iPhone 12s as it fears demand will be lower than expected.
Earlier in the month, Apple launched the second-generation iPhone SE – a rehashed version of its iPhone 8 with improved processors – to appease price-conscious markets, but it may turn out to be a runaway success as consumers can no longer justify dropping $1000 on a new smartphone.
Globally, coronavirus is expected to result in 200 million permanent job losses.
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