Wednesday January 30, 2019

Smartphone Manufacturers Slow Production as Global Demand Weakens

According to reports, the global smartphone market is cooling off as manufacturers slowed production in Q4 2018 and have modest goals for Q1 2019. Smartphone sales in Q4 2018 were lower-than-expected and this has led to the scaling back of production by smartphone manufacturers. "TrendForce forecasts that the global smartphone production volume for 1Q19 will come to 307 million units, showing a YoY drop of 10%." Inventory management concerns are rife throughout the industry as the manufacturers ignore the availability of cheaper components. This sentiment seems to match Apple's recent earnings call where CEO Tim Cook revealed the company's 15% decline in iPhone sales. Trendforce is predicting a significant YoY decline of nearly 26% for Apple iPhone sales as the recent ban on older models in China takes its toll. Market saturation concerns in China are affecting manufacturers and Samsung is rolling out upgraded, economically priced, high-spec devices to fight off Chinese rivals.

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TrendForce notes that major brands will continue to pursue hardware optimization in the immediate term, mainly focusing on these four main areas: display (i.e. high-resolution displays and all-screen design), camera (i.e. high-resolution multi-lens cameras and in-display cameras), biometric recognition (i.e. in-display fingerprint sensors), and memory (i.e. high-density solutions). However, TrendForce believes that smartphone makers, in the long run, will have to do more than just upgrading the hardware specifications of their devices. To expand market shares, they will also need to invest in software development and explore peripheral opportunities.