The economic uncertainty and the pervasive quarantining triggered by the virus quashed demand last quarter, according to Gartner.
Smartphone sales around the world plummeted by 20.2% in the first quarter, the worst year-to-year drop ever reported, Gartner said on Monday. In its press release, the research firm laid the blame on the economic uncertainty and self-quarantining from COVID-19 as consumers stopped spending money on nonessential items. Unit sales plummeted to 299.1 million last quarter from 374.9 million in the first quarter of 2019.
"The coronavirus pandemic caused the global smartphone market to experience its worst decline ever," Anshul Gupta, senior research analyst at Gartner, said in the press release. "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."
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Among the top five smartphone vendors—Samsung, Huawei, Apple, Xiaomi, and OPPO—all except Xiaomi watched their sales fall.
In the top spot with an 18.5% share of the market, Samsung managed to add more inventory to the retail channel to prepare for new smartphone launches. But an ineffective online channel and the coronavirus lockdown resulted in weaker sales to customers. The sales decline for Samsung could have been much worse, according to Gupta. But a limited presence in China and the location of manufacturing plants outside of China kept sales from falling too far.
Huawei suffered the worst drop of the top five as its smartphone sales tumbled to 42.5 million units from 53.4 million in the prior year's quarter, a fall of 27.3%. Even with the decline, the company retained its No. 2 spot with a 14.2% slice of the market. But Huawei faces some challenges ahead.
"[Huawei] has developed the Huawei Mobile Service (HMS) ecosystem, but with the lack of popular Google apps and Google Play store, Huawei is unlikely to attract new smartphone buyers in international markets," Gupta said.
In third place, Apple is less reliant on China than are Huawei, OPPO and Vivo. Its first-quarter smartphone sales dropped by only 8.2% to 40.9 million units from 44.5 million a year ago. Still, supply constraints and retail store closures hurt iPhone sales last quarter despite the appeal of the iPhone 11.
"Apple had a strong start to the year thanks to its new product lineup that saw strong momentum globally," Annette Zimmermann, research vice president at Gartner, said in the press release. "If COVID-19 did not happen, the vendor would have likely seen its iPhone sales reach record levels in the quarter. Supply chain disruptions and declining consumer spending put a halt to this positive trend in February. 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."
In the No. 4 spot, Xiaomi's sales were better than expected thanks to robust sales of its Redmi devices in international markets and an aggressive online retail channel. For the quarter, its sales inched up by 1.4% to 27.8 million from 27.4 million.
Taking the fifth spot, OPPO saw its first-quarter smartphone sales drop by 19.1% to 23.9 million from 29.5 million. The company's offline distribution system has been one of its strong points but was hurt during the quarter as more customers working from home were forced to buy their products online.
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