Hi guys! I hope you're fine. I wasn't able to write anything yesterday because I had some work. Anyway, I'm back today with another article about what will happen to mobile phone industry post Covid-19.
Introduction
Well, covid 19 happened. One thing we can agree to is the virus was brutal to human lives. It's even more brutal to the economy. One of the markets that suffered the blow was smartphone industry. Finally, after so many quarters it seemed like smartphone industry is bulletproof, but it fell hard.
What happened?
Due to the virus, the lockdown had to be imposed. Now, in a complete lockdown, you can't open stores, showrooms, markets,etc. So the smartphones sat in the godowns. Online portals had to be taken down too. There were more problems with them, compared to offline market. The delivery was one of the biggest problem. Even if your government allows delivery of e-commerce sites, the consumer fears that what if the delivery man is infected? How would they know? So they don't order.
Due to negligible sales, for almost a quarter, the production lines were stopped, and hence the product shortage.
What will happen?
When the covid situation is over and the lockdown is cancelled, what we will face is the aftermath of covid. It won't affect your health. But it definitely would affect your pockets. Due to no income, you'll have to control your purchases, even the small ones. So, who will even think of buying a smartphone amongst all this? The thought of buying one isn't even gonna cross someone's mind. So no sales even after post Covid-19. That's one big blow to economy just by inflation in one industry. That's exactly why experts are saying it'll take at least 10 years to acquire the economy pre covid 19.
Examples
Recently samsung and LG released their sales for the quarter, and it were low, no surprise. Apple lost buisness of $4 billion. Xiaomi and Huawei barely survived in the profit range because of the just released poco and redmi series before the covid happened and due to massive discounts on flagships like P30 and mate30 respectively.
Why was this quarter so important?
Because this was the quarter in which Mobile companies came up with the idea of offering 5G in budget to mid-range phones. This idea was revolutionary. Although there are no 5G networks in most of the countries, and it won't be there for the next two years now, but to consumers, the feature is very fancy. It's like the companies are giving us flagship features in budget phones, to the consumers. And this mindset of buyers was going to lead to enormous sales.
Conclusion
Manufacturers are going to face some of the worst sales of all time, atleast for the next 3-4 quarters. When speaking in smartphone context, even a loss of 3-4% of shares are really bad. It doesn't have to bigger number. Big companies like samsung and Apple are confused. They'll have to release some new schemes in order to increase their sales. We'll see though.
That's my take on the topic. Feel free to ask questions and feedback are appreciated. Like comment and subscribe if you liked the article. Thanks in advance. Until Tomorrow, stay safe.❤️