The Incredible Shrinking Smartphone (Forecast)
Taiwan based Trendforce tends to be optimistic when making forecasts, but so far this year they have been unable to pin down a stable estimate for smartphone production in 2021. Back in February they were estimating 1.367b units but only 3 month later lowered that number by about a half percent to 1.36b produced, as COVID-19 outbreaks in a number of countries gave pause to the outlook for 2H. Once again, they have cut that forecast, this time by ~1% to 1.347b units, and have cautioned that it has the potential to be cut again if those outbreaks continue.
While these are relatively small forecast cuts, they do show how volatile the CE market has been this year, and for those products, smartphones included, that are not part of the ‘stay-at-home’ surge, there has been little to get excited about. Many CE companies have cited the impact of COVID-19 on transportation costs and factories in India, Vietnam, Thailand, and Malaysia, all of whom were the recipients of new production capacity as many CE companies transitioned out of China, are now facing issues of their own, with government mandated factory closings and increasing outbreaks putting pressure on an industry (smartphones) that was already seeing little growth. While the smartphone industry is focused on the upcoming Apple (AAPL) iPhone series, the rest of the industry is under the thumb of the pandemic once again, and will likely see further forecast reductions this year.
While these are relatively small forecast cuts, they do show how volatile the CE market has been this year, and for those products, smartphones included, that are not part of the ‘stay-at-home’ surge, there has been little to get excited about. Many CE companies have cited the impact of COVID-19 on transportation costs and factories in India, Vietnam, Thailand, and Malaysia, all of whom were the recipients of new production capacity as many CE companies transitioned out of China, are now facing issues of their own, with government mandated factory closings and increasing outbreaks putting pressure on an industry (smartphones) that was already seeing little growth. While the smartphone industry is focused on the upcoming Apple (AAPL) iPhone series, the rest of the industry is under the thumb of the pandemic once again, and will likely see further forecast reductions this year.
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