The smartphone market reduces its growth
The global smartphone industry is facing a change of pace. It is no longer expanding at the previous speed, forcing brands to rethink how they operate. To keep their finances healthy, many are now betting on selling higher-value phones, where the profit margin is wider. This is the new reality of the sector 📉.
The lack of key components is slowing down the industry
A major obstacle limiting the manufacture of devices is the global shortage of memory chips. This lack of essential parts means suppliers cannot assemble all the phones they had planned. The problem affects the entire chain and contributes to further slowing down the market.
Direct impacts of the shortage:- Companies cut their unit production targets.
- They cannot meet potential demand due to lack of components.
- Some market players feel more pressure than others.
In the tech world, sometimes what's most lacking is memory itself.
Major manufacturers review their plans
Analysts anticipate that companies headquartered in China, which dominate in sales volume, will reduce their production by more than 20% this year. They must manage their semiconductor reserves very carefully. Their strategy is leaning more heavily towards premium models, where selling fewer units but with greater profit per unit becomes crucial.
Ongoing strategic changes:- Focus on high-end and upper mid-range segments.
- Optimize inventories of available chips.
- Adjust sales forecasts downward for this period.
A future with less volume but more value
The market transition is clear: prioritize profitability over gross sales volume. This strategic adjustment seeks to compensate for the drop in the total number of phones sold. The focus on more expensive devices is not an option, but a necessity for manufacturers to keep their businesses afloat in a more complex environment.