Shulou(Shulou.com)11/24 Report--

CTOnews.com, March 9, according to a new report from TrendForce Jibang Consulting, smartphone brands had expected to drive channel inventory removal through activities such as 2022 festivals and e-commerce promotions, but the global economic weakness continued to impact consumer confidence, resulting in lower-than-expected overall market demand and dragging down the progress of channel inventory removal. According to the report, about 301 million smartphones were produced in the fourth quarter of 2022, an increase of 4% month-on-month and a decrease of 15.5% from the same period last year.

Affected by the epidemic and the conflict between Russia and Ukraine in the first half of 2022, demand weakened sharply, while in the second half of the year, due to high inflation, food shortages, and rising energy prices, the economy declined more than expected, further weakening market spending power. In addition to the impact of the above negative factors, the high-end inventory of brand channels is also one of the keys to the reduction of production in 2022. Research shows that the final production of smartphones in 2022 is 1.192 billion, an annual decrease of 10.6%, exceeding the annual decline at the beginning of the epidemic.

The fourth quarter of 2022 is the sprint period for Apple's new products. Despite the impact of Foxconn's lack of work, Apple still produced 7350 million units in the depressed market, with a quarterly increase of 44.7%, ranking first in the world. It produced about 233 million units in the whole year, ranking second in the world. In 2023, in addition to continuously upgrading hardware specifications, the development focus will also be introduced into the second assembly plant in the Pro series, and will continue to expand the production scale in India.

Taking into account the pressure of channel inventory, Samsung again reduced the production rate of local factories in December 2022 to balance inventory. As a result, production fell to 58.3 million units in the fourth quarter of last year, down 9.2%, the lowest in all quarters of 2022. The annual smartphone production of about 258 million units, an annual decline of 6.1%, still ranks first in the world. In the future, Samsung will pay more attention to the high-end market to stimulate profit growth. (CTOnews.com Note: "farming rate" is called activation or utilization in English, which refers to the proportion of time taken by the equipment to create value in the time that can be provided. )

The third to fifth places in the fourth quarter of 2022 were Xiaomi (including Redmi, POCO, etc.), OPPO (including realme, OnePlus) and vivo (including iQOO). Production declined in the fourth quarter and 2022. According to a survey conducted by TrendForce Jibang Consulting, Xiaomi will give priority to the elimination of channel inventory within half a year, which will weaken the production performance in the first half of 2023. The proportion of OPPO sales in overseas markets in recent years has risen to 60% by 2022, but the current channel inventory is on the high side. In the first quarter of 2023, it is still mainly to reduce output and adjust inventory.

It is worth mentioning that vivo is the first brand in the Android camp to enter inventory correction, so inventory has returned to healthy levels by the end of 2022. However, active inventory adjustment has made the annual output in 2022 less than 100 million units for the first time. In addition, as vivo is still dominated by China's domestic market, as the Chinese market has reached a high degree of saturation and Honor's market share continues to grow, it poses a more direct threat to vivo; moreover, even though the market generally expects China's domestic demand to usher in an economic recovery, vivo's outlook for the future is still quite conservative.

With channel inventory bottoming out, smartphone production is still expected to grow by 0.9% a year in 2023.

Due to the ineffective promotion at the end of 2022, the pressure on channel inventory continued in the first quarter of this year, and the lack of a clear pick-up in market demand, smartphone production will continue to decline in the first quarter of 2023, estimated to be only about 251 million units, an annual decrease of 18.9%. According to the analysis of TrendForce Ji Bang Consulting, for the whole year of 2023, as the brand continues to adjust the channel inventory, it is predicted that the channel inventory will return to the healthy water level in the first half of 2023, and the annual output is still expected to grow by 0.9% to 1.02 billion units.

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