Samsung and Apple “hold hands” in the race to run backwards: Smartphones have never been so “sluggish”

The mobile phone industry is witnessing a once-in-a-lifetime phenomenon for the first time.

According to the latest information provided by the Internet Data Center (IDC), global smartphone sales in 2022 have reached a record low since 2013. For the first time in 10 years, the number of mobile phones sales in China fell deeply, to less than 300 million units. Sales of major brands, including Apple and Samsung, also fell sharply.

In fact, even after the Covid-19 pandemic hit the world in 2020, Apple still had 8% growth that year. But unexpectedly, Apple’s total revenue reached 117.5 billion USD in the fourth quarter of 2022, 5.49% lower than the same period last year. Or Huawei and Xiaomi, companies that have thrived since 2019 also have bad business performance.

In addition, Samsung Electronics, which mainly deals in chips and mobile phones, also posted a bad financial report for the fourth quarter of 2022. The company’s operating profit for the quarter fell sharply by 69. % – the lowest level in the last 8 years. Compared to Apple, which fell by 5.49%, Samsung won the competition once in this “backward running” competition.

2023 will be a pivotal moment. If the sales of large companies do not improve, the entire mobile phone industry will enter the ‘afternoon’ period. Even giants like Samsung and Apple are no exception.

Samsung’s storm

Many in the industry have begun to worry about the mobile phone market. The revenue report provided by Samsung on January 31 surprised the whole market. The company’s profit in the fourth quarter of 2022 has fallen to the lowest level since 2014. One of the reasons is that the demand for semiconductor components is weakening, and at the same time, other products such as smartphones and memory chips. also did not meet expectations. Samsung’s inventory of memory chips piled up, causing the price of each product to decrease as well.

Specifically, the group’s profit dropped by 69%, reaching 3.49 billion USD. Chip segment profit also reached only 220 million USD in the fourth quarter, a much lower figure than 7.17 billion USD in the same period in 2021. On the company side, to explain this inefficient business operation. , Samsung said it was caused by a drop in customer demand amid inflation.

Unlike Apple, which only focuses on high-end products, Samsung chooses popular to mid-range phone markets such as India, Southeast Asia and Latin America. But unfortunately, some parts of these regions are experiencing food and energy shortages as well as a rising US dollar that has left many places in a state of inflation.

Inflation in Mexico, Peru and many other countries has broken records for more than 20 years, while the consumer price index in India also reached the highest level in the last 8 years. Consumers using low to mid-range models in these regions will gradually reduce demand, especially for products that need to be replaced and used for a long time such as mobile phones. This is also one of the reasons for Samsung’s revenue decline.

Apple stagnates

According to the latest report, Apple’s net profit of $ 30 billion is 13.4% lower than the same period in 2021 and below expectations. Supply disruptions at the Foxconn factory in Zhengzhou, China have also severely affected shipments of high-end iPhones.

Even Apple CEO Tim Cook has warned that revenue in the first quarter of 2023 will also be lower than the same period last year, even though iPhone sales are expected to increase. This has shown that due to lower consumer demand, sales of other Apple products will also be severely affected.

“The bridge is narrowed”. In the Chinese market, Apple’s sales on Double Eleven also fell year-on-year. It also cut MacBook orders in Southeast Asia by the end of 2022.

Overall, the mobile phone market still has hope for a bright future. Especially for industry giants like Apple and Samsung. It is expected that, after a few adjustments as well as the improvement of the global macroeconomic situation, the two groups will soon recover from the end of this year to 2024.

Synthesis