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Chinese cellphone shipments slump nearly 40% in January

China’s smartphone makers are betting on large-scale adoption of 5G for a rebound.

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China has shipped 20.8 million mobile phones this January, which indicates a major year-on-year drop of 38.9%, according to the latest report by the China Academy of Information and Communications Technology.

The numbers come after the Chinese smartphone industry has hit several hurdles in the past year—shipments in 2019 recorded a 6.2% annual drop from 2018—and now the industry faces an ongoing public health crisis caused by the coronavirus outbreak.

Earlier this month, research firms and industry pundits have cut their forecasts for shipments. Strategy Analytics said that the coronavirus epidemic could knock nearly a third off China’s smartphone sales for the first quarter, and 5% throughout 2020. Canalys forecasted a 40% to 50% drop for the country’s smartphone shipments this quarter if the situation recovers to pre-outbreak levels by the end of February.

Smartphone vendors are getting hurt directly by lagging offline sales and a slowdown in production because of the coronavirus outbreak. However, major players are still releasing new gadgets at a brisk pace—26 new smartphone models were released only in January, up 18.2% from last year, the report revealed. Makers are also betting on large-scale adoption of 5G for a rebound.

Yesterday, tech giant Huawei unveiled the latest version of its foldable phone, the Mate Xs, through a livestreamed conference, as this year’s Mobile World Congress (MWC) was canceled due to fears over the coronavirus.

The Mate Xs, priced at EUR 2,499 (USD 2,700), carries the new in-house Kirin 990 processor with 5G connectivity, and introduces an advanced hinge design and upgraded cameras, the company said. Without Google services, the phone is preloaded with a series of Huawei Mobile System (HMS) apps.