Mobile

Smartphone Demand Plummets In China By 16 Pct

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As China’s economy rebounds from COVID-19, smartphone sales have not been part of the recovery.

Shipments of the devices in China fell 16 percent in June compared to the same month one year earlier, according to government data, a sign that handset demand in the nation with a population of 1.4 billion remains lukewarm, Reuters reported.

The numbers are a bad sign for Apple Inc.

Phone manufacturers delivered 28 million handsets last month, down from 33 million in June 2019, according to the China Academy of Information and Communications Technology (CAICT), a state-backed think tank, the paper reported.

The results were disappointing in May as well, when shipments dropped to 33 million from 36 million in May 2019.

It was a different story in April. Following a slump in the previous months due to the pandemic, CAICT reported smartphone shipments grew an 17 percent percent year over year. At the time, smartphone makers thought the double-digit increase suggested strong sales would continue as the nation reopened, Reuters reported. It represented a reversal  of a trend among China’s smartphone brands, which have suffered for years from fewer sales.

At the end of April, a revised forecast of smartphone production predicted volume will shrink to a record low in the second quarter (Q2) as the spread of the coronavirus continues to hurt sales.

TrendForce, a provider of technology market intelligence, predicted global production of cellphones in Q2 will drop to 287 million units, or more than 16 percent lower than the same period last year. If on target, it would signal the largest quarterly decline on record.

Those Q2 predictions came as smartphone production fell by 10 percent in the first quarter to 280 million units, the lowest in five years.

From January through March, Vivo Communication Technology Co. Ltd., a division of BBK Electronics, a technology company that designs and manufactures smartphones and smartphone accessories in China, was the only brand among the top producers showing growth.

Before COVID-19 took its toll on smartphone sales, TrendForce had expected Apple to again reach yearly production of 200 million units, given the company's plans to release five new models in 2020 and phase out of the popular iPhone 6s series.

But Apple was not immune from the coronavirus pandemic, resulting in the reduced production of its iPhone lineups this year, the survey said.

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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