Coronavirus outbreak: Global smartphone output may drop to 5-year low

Virus outbreak pushes up China's inflation to highest level in 8 years

Virus outbreak pushes up China's inflation to highest level in 8 years

TrendForce, one of the world's leading market research companies, announced that global smartphone production may fall to the lowest level in five years due to the new corona virus outbreak in Wuhan, China.

Researchers at Canalys report that the scheduled suppliers, the launch of new products will be cancelled or postponed.

In 2019, the Chinese economy grew at its worst pace in 29 years, expanding 6.1 percent from a year earlier, with a slowdown in the nation's exports weighing on domestic demand. At the same time, IDC expects it to decline by 30%.

Huawei, China's largest smartphone seller, said its manufacturing capacity is "working normally" without specifying more. According to TrendForce, the main production center of the South Korean technology giant in Vietnam will cause it to suffer less from the virus outbreak than other manufacturers.

Virus outbreak pushes up China's inflation to highest level in 8 years

Moreover, if factories fail to restore and continue their production in its fullest capacity, it would further prevent brands from bringing forth their newer products to the market. OPPO told Reuters that although the epidemic will affect the operation of some local factories, due to the existence of its overseas factories, "production capacity can be effectively guaranteed". Xiaomi did not respond to relevant media comment.

"Delays in the reopening of factories and the return time of labor will not only affect shipments to stores, but will also affect product launch times in the medium and long term", said Will Wong, analyst of IDC.

A report by industry analyst firm TrendForce estimated that the forecast for global production of smartphones will likely see a 12pc dip year on year as a result of the outbreak. It will also affect the product launch times in the mid- and long-term'. IPhone production was reduced by 10 percent to 41 million units, while Huawei's production forecast was reduced by 15 percent to 42.5 million phones. In addition, Samsung Electronics, the world's largest smartphone maker, is considered the least affected company. Similarly, production forecasts for Oppo and Vivo were revised to 2.4 million and 1.7 million units, respectively.

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