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Coronavirus, Ming-Chi Kuo reduces estimates on iPhone shipments

febrero 3, 2020

Coronavirus begins to be seen as a problematic element also in the field of smartphone production. Analyst Ming-Chi Kuo has reduced estimates of iPhone shipments for the first quarter of 2020.

In a note sent to investors obtained from the site AppleInsider, the TF Securities analyst reports lower shipments for smartphones in general. Kuo's latest research shows that shipments in the Chinese market alone have declined between 50% and 60% year on year compared to the same period that includes the Chinese New Year holiday, an element that led to a high inventory in the sales channels.

"Smartphone shipments to the Chinese market were 360-380 million units in 2019," reports Kuo. "We expect shipments to decrease to 310-330 million units year-on-year in 2020 (against the 330-350 million units expected by the market consensus) due to the replacement of devices less than expected for 5G models and the negative impact on consumer confidence due to the coronavirus epidemic ”.

The Android world, according to Kuo, has a specific problem due to updates lower than expected. For now, 5G smartphones do not seem to be a great driving force on the market, and there are no "killer apps" capable of taking full advantage of this type of technology.

"We believe that the main reason for substitutions lower than expected due to the absence of innovative user experiences created by 5G," writes Kuo. "The penetration rate of 5G smartphone growth grows with the replacement of 4G models, while the overall market in general continues to decline, damaging the growth of brands and supply chains".

Woman holding an iPhone

At the moment, Apple's request for 5G devices is unimportant and the problem mainly concerns Android. Apple, according to the analyst, has a concrete problem in the region associated with the coronavirus.

"Our latest analysis reveals that iPhone supplies are affected by the coronavirus problem and therefore we cut shipments projections by 10%, to 36-40 million units for the first quarter of 2020 (compared to 38 million units in the first trimetre 2019) ". "At the moment it is difficult to predict 2020 shipments due to uncertainties about the coronavirus epidemic and consumer confidence."

Kuo did not change Apple's earnings forecast for the second quarter of fiscal 2020 and the Apple stock price target; advises investors to "watch out for the iPhone supply chain after the coronavirus pandemic stabilizes."

Apple has meanwhile announced that the Chinese Apple Stores will be closed until February 9th. Mela, who has 42 stores in China, explains that the decision comes following public health and prevention considerations related to coronavirus. Apple offices and Chinese support centers will also be closed until the same date.

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