Global smartphone production to fall 12 per cent due to Coronavirus outbreak, says TrendForce

First quarter plunge comes as Huawei is expected to produce only 42.5 million smartphones

Global smartphone output may fall by 12 per cent in the first quarter of 2020 due to the Coronavirus outbreak in China.

That's according to research firm TrendForce, which predicts that smartphone production in the current quarter will fall to 275 million units - its lowest level in five years. The forecast comes just weeks after Gartner predicted a modest three per cent increase in global sales this year.

TrendForce has revised down Huawei's production by 15 per cent to 42.5 million units. Huawei was put on the US Entity List in May last year and was subsequently prevented from using Google Mobile Service on newer models. However, it enjoyed a sharp sales spike in China that more than compensated for lost overseas sales.

But the Coronavirus outbreak and the impact it has had on China's economy has forced a sharp downgrade. Huawei is now predicted to produce just 42.5 million smartphone units in the first three months of 2020.

For the Apple iPhone, TrendForce gas revised down its forecast by 10 per cent to 41 million units. The challenges for Apple in the short term include uncertainties in its supply chain as a result of factory closures. This could affect the production of iPhones, as well as well as the supply of components for new iPhones. These setbacks could directly affect the upcoming release of the anticipated Apple iPhone SE2, TrendForce claimed.

South Korean smartphone maker Samsung will be least affected by the virus outbreak because its main production base is in Vietnam. Samsung's smartphones account for just two per cent of the domestic market in China. TrendForce, therefore, lowered production forecasts for Samsung by just three per cent to 71.5 million units.

China currently accounts for 16 per cent of global smartphone production. However, the Coronavirus outbreak has forced a large number of companies in the country to shut their offices, stores and, especially, factories.

Last month, Apple and Samsung announced that they won't re-open their offices in China following the Chinese Lunar New Year holidays. Huawei, Xiaomi, Oppo and Vivo all followed suit.

For Xiaomi, TrendForce lowered its first quarter forecast by 10 per cent to 2.47 million units. Similarly, production forecasts for Oppo and Vivo were revised to 2.4 million and 1.7 million units, respectively.