Three problems that all phone manufacturers will face. What threatens us

Written By O. Love

Many people think that the worst thing for smartphone manufacturers remains somewhere behind, in the fog of a pandemic that is gradually receding into the past.

But that’s not really the case, and now Chen Jin, general manager of Lenovo’s Chinese mobile phone division, said that his line of business has at least three major problems.

They apply not only to his company, but to the entire industry as a whole, and this will definitely not go unnoticed by ordinary users.

Let’s look at what the head of a large company is talking about and understand what to prepare for. Or maybe, on the contrary, you need to relax and not worry about it?

Phone problems

The first problem that manufacturers will face will be a drop in demand, which has not yet been compensated by the market and continues to put pressure on companies. Also, the uncertainty of the exchange rate in the Chinese market will become a problem.

It seems that this should not affect the rest of the markets, but the problems of Chinese manufacturers are the problems of the whole world.

Another reason that puts pressure on manufacturers is the ongoing “chipocalypse” (short supply chips). Moreover, according to many experts, recent events in the world can lead to an increase in the shortage of semiconductors.

Which phone manufacturers are affected by the crisis

Chen Jin pointed out that all manufacturers in the Android camp are facing these three main problems.

However, this is more reflected in some brands than others. This is due to the fact that the reaction of these companies to the situation is different.

Companies with a large user base, high sales, and a good reputation have a slightly easier time getting through this crisis and experiencing less pressure.

phones

The situation with phones has been very difficult for more than two years. Improvements are not expected yet.

Previous reports indicate that chip makers such as Samsung Electronics and TSMC are currently facing huge costs.

Due to supply problems or rising prices for chemicals, natural gas, and other resources, the average cost of manufacturing processors is rising by 20-30% .

Samsung processors

Samsung Electronics even plans to increase semiconductor production by 20% this year. This is how she plans to turn the tide and manage the cost of materials and logistics.

Ultimately, it is not even possible to say yet how this will affect manufacturers of smartphones and cars, which also use a lot of chips.

On the other hand, the smartphone industry is facing declining supply. According to a Strategy Analytics report, the Chinese smartphone market will ship 71.9 million units in the first quarter of 2022.

This is 17% less than last year. The agency also believes that the Chinese smartphone market will shrink by 5-6% year-on-year in 2022.

Users around the world were reluctant to buy mobile devices, according to IDC, and sales fell 8.9% year-over-year. According to the results of the first three months of this year, 314.1 million units were delivered to the market.

Whereas from January to March last year, this figure was 344.7 million pieces. According to analysts, the problems are related to the shortage of components, as well as the unstable economic and geopolitical situation.

The largest decline is observed in Central and Eastern Europe. In the same regions, a further decrease in shipments is expected.

CPU

Samsung processors can change the market, but normalization still needs a change in the situation.

Also, deliveries are affected by quarantine measures in China , traffic blockages on the border of Russia with Europe and problems with container traffic.

Will phone prices change?

Based on the foregoing, we can conclude that the pandemic, which, combined with other problems, has broken all supply chains, is not the only factor in the crisis in electronics.

This means that while reducing the cost and reducing the delivery time is not worth waiting for. Smartphones and other electronics will be in short supply and will cost more than they could.

Therefore, it is too early to relax – with electronics, not everything is as good as we would like. We will definitely tell you when is the best time to buy a phone.

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