The coronavirus outbreak may hit supplies of smartphone components from China to other countries including India at least till the second quarter of this year, suggests a new report. While smartphone manufacturing has picked up in India over the past few years, the country is still dependent on China to a large extent for supplies of components. "There will be an impact on new devices to be launched in the first half which have facilities in China, as factories will not function properly. Components sourced from China will also be impacted as all factories will resume operation slowly and cautiously," said Peter Richardson, Research Director, Counterpoint Research.
This will range from displays from BOE Technology, China Star Optoelectronics Technology (CSOT) and semiconductors from YMTC and further on. "So the negative impact from the supply chain side will last until end of Q2 minimum," Richardson said. "Overall we think Q1 and Q2 will show negative growth both globally and in PRC (China) before rebounding," Richardson said. According to Counterpoint's projections, global smartphone sales in the first quarter of this year will also go down seven per cent compared to the same period last year.
"This is our base case scenario. The downside risks are increasing daily and we will likely revisit this forecast based on emerging information over the next days and weeks," Richardson said. Smartphone sales in China may see a 30 per cent drop during the lockdown period which is likely to last through the end of March. "Some offline retailers are saying they have experienced a 50 per cent drop in sales during the late January period. However there are some sales offset by an increase in online sales," Richardson said.
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