Smartphones down 12% in Q1, with Apple third behind Samsung and Huawei

iPhone SE
Apple, which released the new iPhone SE on April 24, saw only a slight decline in total smartphone shipments in the first quarter, despite COVID-19. (Apple)

Smartphone shipments dropped by nearly 12% in the first quarter of 2020, the largest year-over-year decline ever for the quarter, analyst firm IDC said.

The downturn is no surprise, given COVID-19’s impact on lockdowns that began in January in China, where many smartphones are assembled, IDC said yesterday.  China also saw shipments drop 20% for the quarter. The nation is also about one-fourth of the overall smartphone market with a population of about 1.4 billion.

The U.S. saw smartphone shipments drop 16%, while Western Europe declined by 18%, IDC said.

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While Apple came in third behind Samsung and Huawei in total shipments globally, it only saw a 0.4% decline compared to the year-earlier quarter, according to IDC.

“What started as primarily a supply-side problem initially limited to China has grown into a global economic crisis with the demand-side impact starting to show by the end of the quarter,” said Nabila Popal, an IDC research director.   The demand decline occurred as consumer spending flatlined with stores shuttered and consumers laid off and worried about buying groceries instead of new smartphones.

Apple and Samsung, makers of the most popular smartphones, described the declines in first quarter earnings calls earlier in the week. Samsung officials said first quarter demand fell “drastically” and said mobile demand remains “highly uncertain” due to COVID-19, although sales of the new Galaxy S20 Ultra were better than expected.

RELATED: Samsung reports solid memory demand, drastic smartphone decline

In its consolidated financial statement for the quarter through March 28 issued on Thursday, Apple reported iPhone, Mac and iPad net revenues were down from the first quarter of 2019, with iPhone sales at nearly $29 billion, a drop of nearly 7% year-over-year. The wearables and accessories segment improved, while Apple services saw a large jump to record $13.3 billion, an improvement of 16.5%.

Overall, Apple posted $58.2 billion in first quarter revenue, up 1% from the year-ago quarter, while net income dropped to $11.2 billion, down less than 1%.  In a CNBC interview, Tim Cook described a “very steep fall-off in February…That began to recover some in March, and we’ve seen further recovery in April. So, it leaves us room for optimism.”

Qualcomm, the largest maker of wireless chips, is forecasting a 30% drop in handset shipments for its third fiscal quarter compared to its prior expectations. With 5G handsets, specifically, launches across all regions remain on track.

RELATED: Qualcomm upbeat on 5G smartphone launches despite COVID-19 impact

Overall, Qualcomm is forecasting 5G devices shipments of 175 million to 225 million in 2020. 

Net income at Qualcomm dropped 29% for its fiscal second quarter compared to a year earlier.  However, revenues for Qualcomm actually increased by 5% for the quarter over a year ago, reaching $5.2 billion.

Samsung and Huawei both beat out Apple in smartphone shipments in the first quarter, with 58.3 million shipped, a market share of 21%, according to IDC. Huawei hit 49 million and Apple had 36.7 million. Xiaomi was fourth with 29.5 million shipped and vivo was fifth with 24.8 million.

Year-over-year, Samsung shipments declined the most in the quarter, down by 19%, while Huawei’s decline was 17% and Apple’s decline was 0.4%.

In a bit of positive financial news for the chip industry, VLSI research reported Friday that semi sales recovered for the third week in a row with NAND, logic, analog and power the best performers. Auto and DRAM are the worst. 

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