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Global smartphone market likely to contract over rampant coronavirus

Samsung to temporarily cut production of Galaxy S20 in Gumi, produce more in Vietnam

Galaxy S20 phones (Yonhap)
Galaxy S20 phones (Yonhap)

Amid the ceaseless spread of the novel coronavirus around the globe, the world’s smartphone market is forecast to witness a contraction in the first half of the year, according to various market reports on Sunday.

US-based Counterpoint Research said in its latest report that the global handset market is estimated to shrink 5 percent in the first quarter alone.

Strategy Analytics said the volume of smartphone shipments worldwide would decline 10 percent from its initial forecast largely due to the COVID-19 scare and the resulting contraction in consumption.

“The impact to supply and demand was most acute in China, and supply restrictions have started to show up in other global markets,” Counterpoint Research said. “However we are now expecting to see some impact to demand in global markets as consumers moderate their economic activity in the face of personal and economic uncertainty.”

While Apple and Huawei, whose production facilities are concentrated in China, are apparently expected to take a significant blow from the globally rampant virus, Samsung Electronics is trying hard to diversify its production sites to minimize the fallout.

After reporting six confirmed COVID-19 infections at its smartphone plant in Gumi, North Gyeongsang Province -- with the sixth case being reported Friday -- Samsung decided to temporarily scale back operations on the Gumi line and have its Vietnam plant increase production to compensate.

The Gumi line used to produce premium models sold for the domestic market such as the Galaxy Note 10, Galaxy S20 and Galaxy Z Flip.

“In order to minimize the potential impact from coronavirus on our operations, we are temporarily allocating a small portion of our production from the Gumi complex in Korea to Vietnam,” a Samsung official said. “This is a precautionary decision to best serve our consumers and we will return Gumi’s production to normal levels when appropriate.”

By Song Su-hyun (song@heraldcorp.com)
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