Smartphone shipments hit by economic headwinds

Demand has started to wane following economic headwinds and regional uncertainty…reports Asian Lite News

Global smartphone shipments fell 9 per cent (year on year) in the second quarter (Q2) this year as Samsung led with a 21 per cent market share, a new report has said.

Apple came second with a 17 per cent market share as the iPhone 13 remained in high demand.

Xiaomi, OPPO and vivo continued to struggle in China, suffering double-digit declines to take 14 per cent, 10 per cent and 9 per cent market shares, respectively, according to research firm Canalys.

Demand has started to wane following economic headwinds and regional uncertainty, the report noted.

“Vendors were forced to review their tactics in Q2 as the outlook for the smartphone market became more cautious,” said Canalys Research Analyst Runar Bjorhovde.

Economic headwinds, sluggish demand and inventory pileup have resulted in vendors rapidly reassessing their portfolio strategies for the rest of 2022.

“The oversupplied mid-range is an exposed segment for vendors to focus on adjusting new launches, as budget-constrained consumers shift their device purchases toward the lower end,” he added.

Falling demand is causing great concern for the entire smartphone supply chain.

“While component´┐Żsupplies and cost pressures are easing, a few concerns remain within logistics and production, such as some emerging markets’ tightening import laws and customs procedures delaying shipments,” said analyst Toby Zhu.

In the near term, vendors will look to accelerate sell-through using promotions and offers ahead of new launches during the holiday season to alleviate the channel’s liquidity pressure.

But in contrast to last year’s pent-up demand, consumers’ disposable income has been affected by soaring inflation this year.

“Deep collaboration with channels to monitor the state of inventory and supply will be vital for vendors to identify short-term opportunities while maintaining healthy channel partnerships in the long run,” Zhu added.

Meanwhile, potential demand for the upcoming iPhone 14 and iPhone 14 Pro series is continuing to grow in China, says a new report.

In a tweet, analyst Ming-Chi Kuo said that his continued conversations with distributors, retailers, and scalpers in China has led him to believe that “potential demand for the iPhone 14 series is continuing to increase,” reports AppleInsider.

According to Kuo, this is likely because Apple “almost dominates” the high-end smartphone market in China after Huawei exited the 5G market in the wake of a US ban that left the company unable to source many of its core components and technologies.

The gap left by Huawei means that there are a greater number of potential iPhone users in the market than there were before, Kuo said.

Kuo’s latest prediction builds on a previous forecast he shared in late June.

In a tweet on June 30, the analyst said that potential demand for the upcoming iPhone 14 and iPhone 14 Pro could be stronger than the iPhone 13.

That’s particularly significant because the iPhone 13 is said to be selling better than past lineups, the report said.

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