(Yicai Global) May 19 -- China’s mobile phone shipments sank 40.5 percent in March from a year earlier because of weak demand amid the impact of a resurgence of Covid-19 on offline retail, according to a government think tank.

China shipped 21.5 million handsets in the month, data released by the China Academy of Information and Communications Technology, under the Ministry of Industry and Information Technology, showed yesterday.

In February, shipments had fallen to a 15-month low of about 14.8 million, while those in the first three months of the year had slumped just over 29 percent to 69.3 million.

April’s shipments are expected to have been even more sluggish due to the impact of Covid-19, said Chen Jun, vice president and chief analyst at Sigmaintell Consulting.

This month’s figures are not likely to be much better. The manager of one first-tier phone dealer said sales were down about 30 percent during the Labor Day holiday, compared with the same time last year, while those for the whole month are expected to drop between 20 percent and 30 percent.

In the first quarter and Labor Day holiday, sales missed expectations, the manager added, noting that the industry has to hope that another Covid-19 outbreak will not impact the next usual peak season in the summer.

“This year's annual shipments should fall below the 300 million thresholds,” Chen told Yicai Global, adding that a more pessimistic forecast would be 270 million. But if the market picks up in the second half, annual shipments could reach 287 million.

Last year, China's phone shipments rose almost 14 percent to 351 million, according to data published by the China Academy of Information and Communications Technology in January.

Mobile phone makers will push budget handsets in the price range of CNY1,000 (USD148) to boost second-half sales, Qi Yinan, deputy director of research at Counterpoint Research, told Yicai Global.

Editor: Tang Shihua, Futura Costaglione