China will drag the global smartphone market down this year
China will drag the global smartphone market down
According to Bloomberg, the Chinese smartphone market is expected to shrink by 38 million units, accounting for about four-fifths of the global decline, the largest decline in 2022. The reason is due to the dual effect of the slowdown. The blockade of the Covid-19 epidemic, along with rising inflation, reduced consumer sentiment. Central and Eastern Europe are also forecast to shrink rapidly because of geopolitical tensions.
“The prolonged lockdown affects global demand and supply simultaneously, reducing demand in the world’s largest market and tightening bottlenecks in supply chains already facing many challenges. “, IDC Research Director Nabila Popal said in the report.
Global smartphone forecast for the first quarter of 2022.
Despite some stumbling blocks due to the lockdown situation in China, overall Apple seems to be the least affected supplier due to better control of its supply chain, and because the majority of the company’s customers. In the high-priced segment, it is less affected by macroeconomic issues such as inflation. Meanwhile, Chinese competitors are experiencing the worst drop in shipments since the outbreak of the Covid-19 epidemic.
According to Bloomberg, Apple plans to try to keep iPhone production stable this year, although it was previously expected to increase production when focusing on the significantly upgraded iPhone 14 series.
IDC’s global forecast is a reversal from previous projections for growth of 1.6%. However, IDC sees the difficulty for the smartphone industry to fade away in the second half of 2022, unless there are any additional setbacks.
The US market research firm forecasts a rebound in growth to 5% in 2023. Other market researchers expect the Asia-Pacific region to see broader growth, excluding China. and Japan.
Difficulties in the market of billions of people
Apple held its annual developer event in California, USA on June 6 with much excitement, but its biggest dramas are happening on the other side of the world. In Shanghai and surrounding areas, Apple encountered supply chain difficulties and other problems caused by the Covid-19 blockade. The Chinese market, Apple’s huge growth engine, is also volatile.
To date, boosting sales in China is one of the most important achievements under CEO Tim Cook. He is a person with great merit when turning this country into a giant production area, helping to cut costs. However, the game of concentrated production gradually became risky.
Apple’s weakness was exposed last month, when clashes broke out at a supplier partner’s factory in Shanghai. Being isolated from society for a long time with limited space has affected the mental health of workers.
Most of the overtime workers just hang around a few activities such as playing video games, talking to colleagues, complaining about the pressure… Tired and frustrated with this policy, many people try to climb over. fence or break into the foreman’s dormitory.
Apple finds another way
Apple warned that disruptions due to chip shortages and China’s Covid-19 blockade will cost $ 8 billion in revenue this quarter.
According to Bloomberg reporter Mark Gurman, the Zero Covid policy has affected MacBook shipments. US consumers have to wait about 2 months if they order a 14- or 16-inch MacBook Pro. Therefore, it is not surprising that the MacBook Air model that was released earlier this week will not be on the shelves in July as expected.
Apple is looking to reduce its dependence on China. In a recent investor phone call, Mr. Cook insisted his supply chain was “truly global”. Since January 2021, Nikkei has reported that Apple is expanding iPad production facilities outside of China, with the expected destination being Vietnam. However, the complicated situation of Covid-19 last year caused this plan to be postponed.
Building localized supply chains is not a task that can be accomplished quickly. It took Foxconn more than three decades to reach the size it is today, thanks to a comprehensive network of component manufacturers that has expanded over time. No country has gathered the necessary components to replicate Foxconn’s iPhone assembly facility in China. During peak season, Foxconn employs several hundred thousand workers.
At the same time, China is struggling to meet its economic goals for this year. Markets are still suffering from the Zero Covid campaign. A positive for Apple is that the situation is still better than Android rivals when the iPhone production target in 2022 is not much different from 2021.
As more and more companies seek to diversify production and reduce dependence on China like Apple, it is likely that the country will eventually lose its status as the “world factory” and the most promising growth market. . However, to do that, will not be an easy journey.
at Blogtuan.info – Source: genk.vn – Read the original article here
