Smartphone Sales Will Drop 13%, But Bounce Back in 2021: Report

Coronavirus-related supply and demand disruptions will mean the smartphone market's worst year in a decade, according to a new forecast.
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Smartphone makers will ship just 1.57 billion units this year -- the lowest number in a decade, according to research firm CCS Insight.

That represents a 13% drop compared to 2019, with sales likely to remain subdued through the end of this year even if the economic situation improves. 

"Data from China gives us a good indication of the effect that lockdowns and consumer uncertainty have on demand for phones," said Marina Koytcheva of CCS Insight. "In January and February 2020, sales volume fell 44% from the same period in 2019. Early data from other countries that have introduced strict measures to fight the pandemic suggests similar declines."

Supply chain disruptions and store closures tied to coronavirus have greatly dampened demand for smartphones, even new 5G models. 

Samsung warned investors recently that 5G won't save smartphone sales this year, with the market "contracting" due to coronavirus. 

As of just days ago, Apple  (AAPL) - Get Report was also reportedly considering a delay in launching its 5G phone because of demand concerns. Apple's retail stores outside of China are currently closed until further notice. 

In late February, the iPhone giant revoked its March quarter revenue guidance, which was originally set at the $63 billion to $67 billion range, citing widespread manufacturing disruptions and weakening China sales due to the pandemic.  

Smartphone sales will mostly recover in 2021, but not exceed last year's results, according to CCS Insight. 

Sales are likely to remain muted through this year's holiday sales season but will grow 12% year-over-year in 2021, followed by a sales boom of 13% in 2022 to 2 billion units according to the report.