China’s smartphone shipments fell over 20 per cent in first 10 months of 2022, report says

Smartphone shipments in China fell by over 20 per cent in the first 10 months of 2022, according to a new government report that revealed the impact of supply chain disruptions in the country caused by the Covid-19 pandemic.

The drop in shipments from about 275 million units in the same period last year to about 214.5 million in 2022 also throws light on the slowing demand in the world’s largest smartphone market due to China’s deepening economic slump.

The report, published by the China Academy of Information and Communications Technology (CAICT), a scientific body under the country’s Ministry of Industry and Information Technology, noted that in October alone smartphone shipments dropped by over 27 per cent compared to last year.

The market’s plunge also reflects the impacts caused by the frequent draconian Covid lockdowns in the country as well as the weak economic environment in China.

Earlier this month, the technology and consulting services firm International Data Corporation (IDC) predicted that this decline in Chinese smartphone shipments could narrow in 2023 with a rebound likely in the year after that.

Slowing smartphone demand has also prompted Chinese companies like Xiaomi Corp to start rounds of layoffs that have slashed its workforce by nearly 10 per cent with over 900 jobs cut earlier this year.

The country continues to battle rising Covid-19 infections with the World Health Organization (WHO) noting last week that it is “very concerned over the evolving situation...with increasing reports of severe disease.”

Covid-19 cases have surged in China after the country’s ruling communist party abandoned its controversial zero-Covid policy amid waves of protests, and has loosened restrictions and ended the requirement for daily PCR tests.

While Beijing’s official reports say there have been no new Covid deaths for six days through Sunday, reports from Reuters and the Associated Press point to drug shortages and queues at crematoriums across several parts of the country.

British health data firm Airfinity said last week that the daily infection rates in China could likely be over a million with more than 5,000 deaths a day – figures that are a stark contrast from official numbers.

As more workers across China fall ill amid the current surge in Covid-19 cases, experts point out that there could be further disruptions to supply chains in the short term before the country’s economy bounces back later in 2023.