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Smartphone market expected to decline this year amid coronavirus outbreak, IDC says

The global phone market will drop 2.3% in 2020, with just over 1.3 billion shipments, the firm estimates.

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- 02:18
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Coronavirus could lead to more drops in smartphone shipments.

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Coronavirus is expected to negatively impact the global smartphone market in 2020, which will see a 2.3% decline and a shipment volume of just over 1.3 billion units, according to a forecast released Thursday by market researcher IDC. 

COVID-19, the name of the disease caused by the coronavirus, will exacerbate slowing smartphone shipments, which will see a 10.6% year-over-year decline in the first half of 2020, the firm estimates. Worldwide shipments will likely grow again in 2021, due in part to an increased focus on 5G, IDC says.

The new strain of coronavirus, called SARS-CoV-2, causes a pneumonia-like disease. It was discovered in Wuhan, China, in December and has now infected more than 82,000 people and killed more than 2,800 around the world.

IDC expects it'll take a few quarters for manufacturing and logistics to recover as Chinese workers gradually return to factories, given transportation challenges. And while China's "demand shock" will last several quarters, it'll be "mitigated by the end of the year with the aid of government-backed stimuli and subsidies," the firm said in a release. 

"COVID-19 became yet another reason to extend the current trend of smartphone market contraction, dampening growth in the first half of the year," Sangeetika Srivastava, senior research analyst with IDC's Worldwide Mobile Device Trackers, said in a statement. "While China, the largest smartphone market, will take the biggest hit, other major geographies will feel the hit from supply chain disruptions."

Issues like factory shutdowns, quarantine mandates and travel restrictions will make it difficult for vendors to make and roll out devices, Srivastava added. The situation is expected to get better starting in the third quarter as the situation surrounding the outbreak hopefully improves and 5G picks up. 

"For the epicenter, China, we forecast the domestic market to drop by nearly 40% year over year for first quarter and even with a potential March recovery it will still be difficult to reach last year's levels," Will Wong, research manager with IDC's Asia/Pacific Client Devices Group, said in the statement. "Buyers will purchase from online channels, which will account for a significantly increased share of phones sold in the first half of 2020 and may represent a permanent shift in buying behaviors."

Originally published Feb. 27 at 3:17 p.m. PT.
Update, 3:42 p.m.: Adds more details throughout.