Chinese Smartphone Makers Brace for Toughest Year Amid Soaring Chip Prices
Quick Look
- Chinese smartphone makers face their most challenging year since the pandemic due to skyrocketing memory chip prices.
- Analysts predict a nearly 14% drop in global shipments, forcing brands to absorb costs, raise prices, or reduce storage.
AI-generated summary
Why It Matters
Chinese smartphone makers are heading into their most difficult year since the Covid-19 pandemic. Market research firm Counterpoint projects global smartphone shipments to fall nearly 14% this year, reaching the lowest volume since 2013.
Chinese smartphone makers are preparing for their most challenging year since the Covid-19 pandemic, as analysts say skyrocketing memory chip prices are forcing brands to make a difficult choice: absorb the higher costs, raise retail prices or downgrade storage configurations.
In a report published on Monday, market research firm Counterpoint projected that global smartphone shipments would plunge nearly 14 per cent this year to about 1.08 billion units – the industry’s lowest volume since 2013.
The sharp contraction was being driven by the dual blow of soaring memory costs and sluggish consumer demand for replacement handsets.
However, market pressure is likely to hit vendors unevenly, Counterpoint said. Apple and Samsung Electronics are expected to weather the downturn best, shielded by stronger pricing power and premium-heavy product portfolios.
Other Chinese Android vendors, including Oppo, Vivo and Transsion, are also expected to face pressure as higher component costs weigh on their price-sensitive product lines and overseas emerging-market sales.
What to Watch
AI outlook — possibilities, not facts
Global smartphone shipments will fall to about 1.08 billion units.
Very likely
Apple and Samsung Electronics will perform better than other vendors.
Likely
Oppo, Vivo, and Transsion will face significant pressure.
Likely
Open Questions
- What specific storage downgrade strategies will Chinese brands employ?
- How will Apple and Samsung's pricing power truly shield them?
- What is the projected impact on specific emerging markets?
- Will component costs continue to rise or stabilize?
