Driven by Huawei, China remained the largest contributor to the global 5G market, capturing 46% of the total 5G devices sell-through in 2019, a new report said on Thursday.
While Samsung led the global 5G sales with over 40% of the market share, Huawei (including Honor) alone captured 74% of 5G sales in China.
“However, the high dependence of Huawei on the Chinese market makes it most vulnerable to the effects of the COVID-19 outbreak on the smartphone market,” according to the latest research from Counterpoint’s ‘Market Pulse Service.’
The China smartphone market sell-through declined 8% (YoY) in 2019 – the decline was steeper than the global smartphone market sell-through, which reduced 3% (YoY).
“China handles at least 50% of global smartphone production and the coronavirus outbreak is bound to adversely affect China as well as the global smartphone market,” said Varun Mishra, Research Analyst at Counterpoint.
There will be disruption from the supply-side with production facilities of smartphones and components either shut down or running below full capacity due to labour shortages.
“The overall demand will also dramatically fall due to disruption in retail. Offline stores will be affected the most. We are estimating sales to drop over 20% in China in Q1 2020,” Mishra added.
The OEMs which will be affected the most are the ones having production facilities in the Wuhan area like Lenovo and Motorola, and the ones for whom China is the major market like Huawei.
OEMs like realme, Honor, and Xiaomi, which are more reliant on online distribution are likely to be least affected compared to those that have a relatively high share of offline sales, said Mishra.
While all the major OEMs declined – OPPO (down by 12% YoY), Vivo (6% YoY), Xiaomi (22% YoY), Apple (26% YoY), Huawei (including Honor) grew 28% for the full year, capturing over one-third of the largest smartphone market in the world.
Huawei has been aggressive in China after the US trade ban, which has led to this growth.
