The gist of it: companies are scrambling to shore up Q2’23 supplies into the smartphone market with the expectation that things will pick up in the second half of the year, but at the same time, there is evidence that expectations are being lowered and forecasts are likely to be uneven, and a little schizophrenic, as investor fears are assuaged and earnings are propped up until the economic environment changes.
The smartphone market has been cooling off of late as economic uncertainty weighs on consumer spending. This is impacting Qualcomm’s CDMA Technologies segment, which supplies application processors, modems, and software for technologies for mobile devices, networking equipment, and consumer electronics. We’ll know more after the company’s first quarter results, out shortly, but Qualcomm’s customers have also been holding elevated levels of chip inventory and this could also lead to softer demand for Qualcomm’s chipsets. Over Q1’23, chip sales for smartphones have declined by about 18% to $5.8 billion. Qualcomm is also likely to see its technology licensing business cool off, with the company guiding that sales could contract by about 14% at the mid-point for Q2’23.
In other news, The Elec is reporting, Samsung is considering launching its Galaxy Z Fold 5 and Galaxy Z Flip 5 smartphones two to three weeks earlier than initially planned, in the second week of August, due to concerns over weak earnings in the traditionally slow second quarter. The company aims to post a stronger third quarter to offset two consecutive quarters of poor earnings. To launch the foldable phones early, Samsung must ensure their reliability by July. Apparently, some component production plans have been fast-forwarded, while others remain on schedule for an August launch. The company plans to market the new foldable phones’ water drop hinge, reduced weight, and larger screen size for the Flip 5. Samsung recorded its lowest operating profit in 14 years for Q1’23, and Q2’23 performance is expected to be poor as well.
Generally, global smartphone sales continued to decline in March, with a 13.6% YoY decrease, with only Apple’s sales growth seen as impressive, the company increased its market share to 18.6%. The rate of decline in the Chinese has improved, however, and a near-term improvement in sales is expected with a slew of new product launches. Samsung’s sales, however, have continued to decline. Some analysts believe, a significant recovery for the second half of 2023, driven by the iPhone 15 series, but MediaTek, according to DigiTimes, has reduced its forecast for smartphone shipments this year from 1.4 billion to 1.1 billion units.
