Coronavirus threatens growth of Brazilian mobile devices market
Mobile phone sales increased by 3.3% in Brazil in 2019 but developments such as the spread of coronavirus could threaten the growth trajectory the segment has enjoyed so far, according to analyst firm IDC.
Some 48.6 million mobile devices were sold in the country last year, of which 45.5 million were smartphones and 3.1 million feature phones.
Revenue also grew 5.6% compared to 2018 at 56.7 billion reais, of which 56.3 billion reais relates to the sale of smartphones and 376.8 million from feature phones.
The forecast for 2020 so far is that the smartphone market will see growth of 2%. According to IDC, the criteria for the positive outlook includes consumer and investor confidence, as well as upcoming administrative and tax reforms.
However, the dollar hike against the real and the evolution of the spread of Covid-19 could turn that positive outlook around quite quickly.
According to Reinaldo Sakis, market analyst at IDC Brazil, the macroeconomic conditions coupled with an increase in production costs and the public health crisis could not only mean limited availability for certain models, but also an increase in prices to consumers.
The Covid-19 outbreak is impacting the supply chains of Brazilian smartphone and computer manufacturers, who can’t get hold of components from China that are needed to assemble products.
According to a third member survey carried out by Brazilian Association of the Electrical and Electronics Industry (Abinee) this year, 70% of manufacturers based in Brazil are struggling to get hold of parts to put items together such as smartphones.
Survey respondents also said that if the situation continues for another month and a half, it may become difficult for Brazilian manufacturers to deliver items to clients.