Supply Chain Disruption Exposes Smartphone Makers, ABI Reports

The global mobile device market had “mass disruption” to its production and supply chains due to labor shortages and inactive logistics resulting from the COVID-19 pandemic that hit China last month, reported ABI Research. The U.S. imported 214.6 million smartphones last year, 74.6% from China, said Census Bureau data we accessed through the International Trade Commission. China was 75.8% of the 14.4 million smartphones imported to the U.S. in January. Import data from February and March are expected to show a COVID-19 impact on reduced Chinese cargo. Supply chain partners such as Qualcomm, Broadcom, Qorvo and Skyworks faced shrinking smartphone demand; first half production could drop by as much as 30%, ABI forecast Wednesday. The 5G rollout will feel adverse effects from the disruptions, which will suppress near-term growth of the next-generation handsets, said the report. A move to lower price tiers was expected to be a key driver for boosting 5G smartphone shipments this year, but now it’s expected that shipment volume for 5G smartphones will be “much lower than previously expected, slowed by a stagnant supply chain and crippled demand,” it said. The market is expected to face disruptions and delays. Global business smartphone units will ship 12% fewer smartphones to enterprises in 2020, Strategy Analytics predicted.