According to key iPhone supplier Maruta Manufacturing, the current slump in smartphone demand will continue into next year. However, sales of high-end smartphones are expected to be stable.
New report predicts how smartphone demand will fare next year
The smartphone market has experienced a ton of ups and downs over the last several years due to a bunch of different factors such as the COVID-19 pandemic, inflation, geopolitical tensions, global housing crises, and more. Another significant factor is the ongoing global chip shortage that has impacted every electronics industry including the production of smartphones, automobiles, etc.
Due to a combination of the reasons cited above, consumers are now choosing to wait a few years to upgrade their smartphones, rather than switching to a new one every year since it is considered to be a luxury for the majority of the population.
Apple iPhone supplier Maruta Manufacturing also experienced a dip in earnings due to weak smartphone demand. The company’s shares have slumped more than 20% this year. It also saw double-digit declines in shipments, especially in China.
In a new report from Bloomberg, The president of Murata Manufacturing, Norio Nakajima, said that smartphone demand will continue experiencing a slump into 2023.
“The momentum will not come back at least during fiscal 2022 and the situation is not that positive going into the next term,” Nakajima said. “Demand for consumer electronics has dropped drastically and these Chinese makers are not feeling well” […]
“Consumers might have been willing to buy new phones even with small upgrades if the economy were in a better shape,” Nakajima said, pointing to interest rate hikes by central banks around the world as a big factor. “What I’m afraid will happen is smartphones get further commoditized and people will wait even longer before upgrading.”
Nakajima also revealed that Chinese companies specifically are experiencing a significant drop in smartphone demand due to various issues including intellectual property infringements.
On a positive note, Nakajima said that demand for high-end smartphones continues to be stable.
One silver lining seen by Murata’s president is sustained demand for high-end phones even during the economic downturn. The weakened yen, which now approaches 150 yen to a US dollar, is also helping prop up the company’s bottom line as 65% of its production is done in Japan but more than 90% of sales are made overseas.
Check out the full report by Bloomberg here.