Mon, Mar 28, 2022 page12

• Smartphone production to drop by 2.5%: TrendForce

  • By Chen Cheng-hui / Staff reporter
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  Global smartphone production is expected to grow at a slower annual rate of 2.5 percent this year due to the sluggish seasonal demand in the first quarter, Russia’s invasion of Ukraine and COVID-19-related lockdowns of Chinese cities, market researcher TrendForce Corp (集邦科技) said on Friday.

  Production is forecast to reach 1.366 billion units this year, down from the previous estimate of 1.38 billion units, the Taipei-based researcher said in a report.

  However, as COVID-19-induced disruptions and semiconductor shortages linger, coupled with concerns about inflation and energy supply, smartphone production might be subject to further downward revisions later, it said.

  

  A demonstrator protests against Russia’s invasion of Ukraine outside the venue of the MWC smartphone event in Barcelona, Spain, on March 1.

  Photo: AFP

  “There are two key observations regarding the effects of the war on the smartphone market: First, brand sales have been suspended or have dropped sharply. Second, the war has exacerbated global inflation, which is strongly affecting energy and food prices in particular, and is rapidly spreading from Europe to the world,” the report said.

  Mobile phone sales in Russia and Ukraine jointly account for approximately 3 to 4 percent of the global market, TrendForce data showed.

  Eighty-five percent of sales in the two countries are in Russia, with Samsung Electronics Co, Xiaomi Corp (小米) and Apple Inc being the top three brands in the country, the data showed.

  Samsung and Apple have announced the suspension of all exports to Russia, and it remains to be seen whether Chinese brands, including Xiaomi and Oppo Mobile Telecommunications Corp (歐珀), would be able to fill the void left by those two global brands in the short term, it said.

  “If the war can be brought under control before the end of April, estimated impact on the smartphone market in 2022 will be approximately 20 million units,” the report said.

  TrendForce said rising inflation would have an adverse effect on people’s disposable income, which would likely prolong the replacement cycle in the smartphone market.

  “Due to inflation’s broad and profound influence, it is not yet possible to determine the extent of its effect on the global smartphone market, but there is indeed a high risk of downward revisions in the future,” the report said.

  TrendForce believes that the COVID-19 pandemic remains a key factor to watch for in the smartphone market this year, especially in China, which continues to follow a “zero COVID-19” strategy.

  “China, the world’s largest smartphone consumer market, is still adopting a dynamic zero COVID-19 policy. Not only will this policy exacerbate labor and material shortages in the intricate smartphone supply chain, pandemic prevention activities will also throw cold water on demand,” the report said.

  As a result, China’s smartphone shipments would decline 7.7 percent annually to 300 million units this year from 325 million units last year, TrendForce said, adding that the possibility of a continued downturn cannot be ruled out.
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