COVID-19 to Slow Down 5G Adoption in China

According to a new report by Strategy Analytics, COVID-19 will slow down smartphone replacement and 5G adoption. The wireless smartphones team at Strategy Analytics has released ‘China Smartphone: Consumer Purchase Intentions Post COVID-19’ based on a survey of 1,300 consumers from March 21 to 25. The report concludes that although Chinese are more optimistic about a rapid slingshot return to normal than US or European consumers, smartphone replacement and 5G adoption have certainly been slowed. 

Key findings of the Report:

  • Smartphones and 5G were not immune from delayed purchasing in China. 37% have delayed a new smartphone purchase and 32% delayed 5G adoption.
  • Apple users are not surprisingly the most optimistic with 41% intending to buy a new smartphone device as planned or sooner than planned.
  • In contrast, Huawei owners were more broadly split with 42% delaying or cancelling planned purchases but another one in four expect to buy as scheduled.
  • Two-thirds have postponed a planned trip while 40% have delayed purchases of cars, furniture, major appliances.

Beyond the death toll and infection count, the economic price to pay in China will be a significant decline in GDP growth and almost certainly some pullback on discretionary expenditures by a generation of Chinese who have never known anything but boom times.

The supply chain and full ecosystem may be back up to speed by Q2, 2020, but it is clear that a significant portion of consumers are NOT yet ready to return to previous purchasing patterns. Operators, vendors, and retailers will have to work extra hard to persuade hesitant smartphone owners that new devices and new 5G services are worth making an investment in relative to other priorities.

Click here to read the full report.

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