More smartphone woes as Q2 is reported. Per CanalysGlobal freight fell 9% in the quarter, reversing a short-lived recovery in a category whose woes have only been exacerbated by the pandemic due to outages, supply chain issues and persistent economic uncertainty.
The 287 million units is the lowest since the second quarter of 2020, when the pandemic began. Interestingly, the confluence of long-standing concerns has led to new problems, namely oversupply. Slowing interest has forced companies to back stocks of older models.
“Supply chain shortages are no longer the most pressing issue as component orders are rapidly shrinking and suppliers are beginning to worry about oversupply,” analyst Tony Zhu said. “This has led to lower prices of key components, which reduces costs for sellers. Vendors can use the additional savings to improve the competitiveness of new product launches in the second half of the year. At the same time, it can make it harder to get rid of older models. A surplus situation demands more of the planning capabilities of sellers than a period of shortage.”
There has been a lot of correction in the industry, coupled with a lot of uncertainty. A category that has effectively trained consumers to anticipate annual maintenance updates is also understandably difficult to move older models. Hardware manufacturers will, of course, continue to adopt a number of different strategies to overcome creaking.
Samsung is the best, maintaining its lead with 21% of the market. The company focused its attention on the budget A-Series. after all, people still need phones, even if inflation and uncertainty have made buying $1,000 flagships largely untenable. On the other hand (so to speak), the company also continues to push its expensive folding strategy as a way forward.
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Meanwhile, Apple is the second most powerful iPhone brand. iPhone 13: defied expectations as the company highlighted modest revenue growth in last night’s earnings report, which contrasted with broader economic headwinds. A good indicator, perhaps, of maintaining consumer confidence despite macro trends. A report earlier this week stated that A sharp 14.2% decline was recorded in the Chinese market in sales due to lockdowns and declining consumer confidence.