China’s smartphone market could plunge 20% as Covid cases spike — but Apple may see growth

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China’s smartphone market could decline in the second quarter as the country experiences a resurgence of covid cases, analysts said. But Apple could fare quite well, the analysts said as it continues to attract users in the high-end of the market.

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China’s recent surge in Covid cases threatens to hurt sales of handsets in the world’s largest smartphone market if it’s not contained, but U.S. giant Apple could still hold up well, analysts told CNBC.

On Wednesday, China reported more than 20,000 Covid infections with the majority in the mega city of Shanghai. Authorities there have imposed strict lockdown measures in the city, threatening logistics and consumer spending.

Neil Mawston, executive director at Strategy Analytics, forecasts a 20% year-on-year decline in the second quarter for smartphone shipments.

Neil Shah, partner at Counterpoint Research told CNBC smartphone sales for April and May could fall 12% to 13% year-on-year.

Sales could pick up in June due to a huge discount shopping event and as Covid subsides. That could leave smartphone sales in China down 3% to 4%, Shah said. If the Covid situation continues, however, the market could drop as low as 12% year-on-year, he added.

The Android segment in China remains a brutal marketplace, with half-a-dozen brands (like Xiaomi) fighting fiercely on price for a piece of a shrinking Android pie.

Neil Mawston

executive director, Strategy Analytics

Smartphone shipments could fall around 3.4% year-on-year in the second quarter, predicted Will Wong, research manager at IDC.

“The impact is expected to be mainly coming from the soft consumer demand and sentiment caused by the Covid outbreak and slower economic momentum,” Wong told CNBC. “The supply disruptions will be a less disturbing factor as the factory bubbles and the government’s experience in curbing the outbreak could help to mitigate the impact.”

In March, Apple iPhone assembler Foxconn briefly had to close one of its main factories in Shenzhen due to Covid. During Covid outbreaks, China has attempted to keep factories up and running as much as possible to reduce disruption.

Android players vulnerable



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