Global smartphone shipments are expected to fall 6.5 percent to 1.27 billion units this year, market research firm International Data Corp (IDC) said in a report last week, slashing its June forecast of a 3.5 percent year-on-year fall.
IDC attributed the downward revision to rising inflation, geopolitical tensions and other macroeconomic challenges that have significantly weakened demand, the report said.
While the market researcher views the decline as a short-term setback and expects the market to rebound next year with a 5.2 percent annual increase in terms of shipments, it cut its five-year compound annual growth rate projection to 1.4 percent through 2026, from the previous estimate of 1.9 percent.
Photo courtesy of Samsung Electronics Co
“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” IDC research director Nabila Popal wrote in the report.
However, many smartphone brands have drastically cut back orders for this year amid “high inventory in channels and low demand with no signs of immediate recovery,” Popal wrote.
“The events of the last twelve months have shaved 150 million units off the market for 2022 from our forecast in the second quarter of 2021,” she wrote.
IDC said the slowdown hit emerging markets harder than developed markets, with China likely to see the most significant volume drop of 12.5 percent, or about 41 million units, which amounts to almost half of the overall reduction in global shipments this year.
Shipments in central and eastern Europe are expected to decline 17.4 percent, while those in the Asia-Pacific region excluding Japan and China are predicted to drop 4.5 percent from the previous forecast of 3 percent growth, the report said.
In contrast, shipments in the US are forecast to edge up 0.3 percent and the Canadian market is to see shipments increase 3.2 percent this year, while western Europe would post a 0.7 percent decline, it said.
“Despite the unit decline, average selling prices have grown 10 percent year over year in Q2 and are forecast to grow 6.3 percent for the full year,” Popal wrote.
In the smartphone market, the premium segment has proved resilient to the economic turmoil and has grown 4 percentage points to 16 percent of the overall market and would continue to grow, she said.
The segment refers to smartphones priced at US$800 or more per unit, with foldable devices the fastest-growing segment that would see shipments increase 70 percent year-on-year to 13.5 million units this year, she added.
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
RSS