Recent revenue reports state that iPhone sales have been badly effected by the COVID-19 pandemic. Smartphone sales report by Gartner for Q1 2020 reflects that the mobile industry has suffered the same economic losses as other industries due to the prevailing global health crisis. Unit sales of smartphones by Apple, Samsung, OPPO, Xiaomi, Huawei, and other are covered in the revenue report.
Anshul Gupta, senior research analyst at Gartner stated:
“The coronavirus pandemic caused the global smartphone market to experience its worst decline ever. Most of the leading Chinese manufacturers and Apple were severely impacted by the temporary closures of their factories in China and reduced consumer spending due to the global shelter-in-place.”
Disruption in production and lower consumer spending are the two major reasons given for the low sales globally. The table below shows the figures of the units sold in first quarter of 2019, which help understand the impact in sales for the first quarter of 2020.
Samsung & Huawei Sales
Samsung lead sales with 18.5% of market share but also reported a loss of approximately 22.7% in 2020 Q1. Huawei followed closely with 14.2% market share and a major hit to sales which may have other reasons as well. Experts anticipate that the damage could have been more if the majority production of operations was in China, because of United States’ imposed tariffs on trade.
Unfortunately for Apple, COVID-19 and trade tariffs on China adversely affected the company in 2020. To maintain social distancing due to COVID-19, the company closed its retail stores across the globe and also experienced development and production delays.
In spite of the hurdles, the Cupertino tech giant is working diligently to deliver new products. In Q1, Apple launched its new iPhone SE, Magic Keyboard, and Pride Apple Watch bands. As per rumors, the company will release iPhone 12, next-generation AirPods, Apple Glasses and more later this year.
Annette Zimmermann, research vice president at Gartner said:
“Apple had a strong start to the year thanks to its new product line up that saw strong momentum globally. If COVID-19 did not happen, the vendor would have likely seen its iPhone sales reached record level in the quarter. Supply chain disruptions and declining consumer spending put a halt to this positive trend in February,” said “Apple’s ability to serve clients via its online stores and its production returning to near normal levels at the end of March helped recover some of the early positive momentum.”
The availability of mid-range iPhone SE and refurbished iPhone XR have also helped the share price of apple which reached an all-time high, yesterday, on June 3. It shows investor confidence in the company in these troubled times. Recently, Bill Gates Foundation bought over 500,000 Apple shares.
Mid-range consumer companies like Xiaomi and OPPO had decent earnings in Q1 2020 because they are pushing their products in lower-income international markets at lower profits.
All in all, healthy competition is good for the global consumer market. The tech industry was expecting lower sales in 2020 because of COVID-19 lockdowns. Thus, Apple and Samsung lowered internal targets for Q1.