Amid the Covid-19 pandemic, smartphones take a blow
08:34 PM, May 27, 2020 / LAST MODIFIED: 09:06 PM, May 27, 2020

Amid the Covid-19 pandemic, smartphones take a blow

The coronavirus has caused death and destruction worldwide. The epidemic has ravaged the corporate world along with the toll on human life, causing financial chaos for businesses and industries.

Like other businesses, the sale of mobile phones has also been hit hard by the pandemic. Sales of mobile phones increase around the two Eids every year. But this time, due to the epidemic, a large portion of the target will not be sold, officials of various companies are expressing fears.

Between 2020 and 2024 the global smartphone market has the potential to rise by more than 64 million units. APAC led the market in 2019 with its high population, rising disposable incomes and growing telecommunications infrastructure, and will continue to do so over the next several years. The industry, however, faces disruption from both the supply chain and consumer demand in the short term.

Many smartphone manufacturers have facilities in China and rely on the country to supply parts, as a result of the coronavirus pandemic, they faced delays. Additionally, demand for smartphones is declining as people save money for important items, or buy computers and tablets to work and research from home.

Speaking of local sales, Asifur Rahman, Head of Mobile of Walton says, "Walton mobile has halted their entire sales and production of mobile phone and other gadgets the moment government imposed the lockdown on 26th March. Therefore, our sales percentage has dropped around 60%- 70% in comparison to our first quarter (January- March). If we look at specific numbers, in the first quarter we have sold around 12 lakhs units but from April 26th to May 20 we have sold 2 lakhs and 20 thousand units only. So, the loss is pretty evident. Apart from that, we have a lot of raw materials stored in our inventory which if waited long enough may not be of any use. To keep the production running, we need certain materials and instruments that we import from other countries which we also cannot get due to the global lockdown."

Rezwanul Hoque, Director of Bangladesh Mobile Phone Importers Association and CEO of Transsion Bangladesh paints a similar picture. He says "In April, 40%-50% of our sales have decreased due to the sudden lockdown. During Eid every year, our sales increase by 30% every time, but this year this is not possible. We can only hope to bounce back by next year."

In the wake of the Covid-19 pandemic, smartphone use has shifted significantly, with users all over the world spending much of their time at home. Video calling has increased as users try to keep in touch with friends, family, and colleagues; and mobile gaming and video watching have risen as people search for ways to stay busy. In fact, the coronavirus quarantine has spurred some demand for smartphones as replacement items by people forced into remote work.

Yet despite the financial crisis impacting everyone, many customers and companies now see new smartphones as a luxury, delaying their purchases, a research firm according to Canalys. Weak business results, redundancies for employees, and furloughs for workers have created anxiety and uncertainty.

Mobile commerce has declined because consumers usually have convenient access to shopping devices, and many are saving their money on important purchases. Because of social isolation and quarantine conditions, customers use far greater numbers of supermarket and take-out apps. The pandemic has inspired many people to use these apps for the first time and some of them will continue to use them until things return to normal.

"Smartphones are playing an extremely pivotal role during the pandemic and this will thrive even after this pandemic is over. Education, commerce, government services, health, financial services all will be going online and smartphone will work as an easier and more affordable gateway to access these services." Says Ziauddin Chowdhury, Country General Manager of Xiaomi Bangladesh.

Experts predict that the coronavirus pandemic will seriously affect the growth of 5G devices, which have begun to gain traction on the global market. Delays in production and reduced demand would dampen the creation of affordable 5G phones, which are required to enable the technology to be embraced on a large scale. It will be difficult for 5G devices to find a foothold as demand for all smartphones diminishes.

In Bangladesh, the situation is not so different. Many markets and shopping malls are still closed despite the Government allowing the opening of shops after almost a month of unofficial lockdown. Many shops are not likely to open before Eid. Traders feel that if sales do not turn out as expected, it could drag on for years.

Ziauddin Chowdhury of Xiaomi says, "A big challenge that we have been facing and foresee as a possibility in the near future as well is the inaccessibility of innovative and latest smartphones in the market due to higher restrictions on imports. Regulators as well as the policymakers need to focus on smartphone penetration in Bangladesh that is currently lower than 30% of the total mobile user base, with a majority of consumers relying on feature phones for regular use due to relatively lower prices compared to smartphones. A more structured approach to reduce illegal imports and improve technological advancement can aid the government in making higher revenue from this sector and build on its vision for a Digital Bangladesh."

Although some shops are open this month, outlets in the big markets and malls are closed. As per the instructions of the government, shops will be open till 4 pm every day from May 10. But two of the largest malls in the country, Bashundhara City and Jamuna Future Park in the capital are closed to avoid the risk of coronavirus infection. In these two markets, there are hundreds of outlets ranging from showrooms of mobile phones of various well-known brands.

If this situation continues till Eid-ul-Adha, the situation in the entire sector will be dire, as handsets are sold the most in these two seasons and now, they are sitting idle.

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