China: Demand for smartphones is declining as restrictions are lifted

by admin, Saturday, 28 May 2022 (2 months ago)

As pandemic-related restrictions are gradually being lifted, Chinese consumers are cutting spending and demand for smartphones in China is declining as a result. Because of this, the major manufacturers of finished products and components were forced to retaliate.

According at China Academy of Information and Communication Technology (CAICT) · Smartphone shipments to China in April totaled 17.7 million units. which is 34% less than the corresponding period last year. We also see a decline when we analyze the market dynamics from the beginning of the year. 86 million devices and a reduction of 30%. In late April, Apple warned that due to the latest wave of Chinese lockdowns, sales revenue for the quarter could fall by $ 8 billion. Xiaomi’s report turned out to be sad: 11% drop in smartphone sales revenue in the first quarter compared to the same period last year – again, according to the manufacturer, are responsible for lockdowns, which caused a crisis in the logistics sector, closed stores and lack of accessories.

The pessimism is shared by SMIC, the largest semiconductor manufacturer in China. The company said the industry forecast for smartphone traffic was overestimated. and by 2022 it will produce 200 million fewer units. Zhao Haijun, one of the leaders of SMIC, reminded that Chinese phone manufacturers should take a significant part of this decline.

Demand for smartphones is declining after restrictions on a pandemic in China were lifted

Chinese smartphones
Contributors: WSJ

The decline in demand for smartphones signals a deeper problem – a general slowdown in the growth of the world’s second largest economy. China accounts for about 20% of global smartphone shipments. According to Taiwanese market research firm TrendForce, the negative trends here are affecting global electronics manufacturers. Analysts and industry executives believe the crisis will hit the low-cost device segment hardest. Low-income consumers choose them and are the first to start cutting costs in the face of financial uncertainty.

Ming-Chi Kuo, Hong Kong-based analyst at TF International Securities. specializing in supply chain, is convinced that Xiaomi, Oppo and Vivo will suffer more from declining demand for smartphones. Apple, whose range is mainly concentrated in the upper price segment. may feel relatively safe, although it is likely to affect sales of the less expensive iPhone SE. By the way, it has already become known that the company is going to sell the same number of devices it did a year ago.

Xiaomi, Oppo and Vivo have reduced their smartphone shipments by 270 million units this year. according to the analyst. TrendForce estimates that in the first quarter, the global smartphone market shrank by 7%. compared to the same period last year · We expect 1.33 billion smartphones to be released in 2022. but this forecast has already halved by 50 million units.

So with all that, analysts say, we should not expect the global chip shortage to decrease in the short term. the global car industry still has to fight for them. and it will be difficult for semiconductor manufacturers to retrain quickly.

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