?According to analyst Toby Zhu, vendors could use the extra savings to improve the product competitiveness of new launches in the second half of the year. "At the same time, that might make getting rid of old models even harder. The oversupply situation is demanding more of vendors' planning capabilities than the shortage period," Zhu noted.The global smartphone market is suffering a second period of falling shipments after a brief recovery in 2021, and the sudden drop in demand is hitting the leading vendors."Despite 6 per cent annual growth, Samsung's shipments fell 16% on the previous quarter as the vendor struggled with unhealthy inventory levels, especially in the mid-range," said research analyst Runar Bjorhovde.Meanwhile, solid demand for the iPhone 13 series in North America, China and Europe enabled Apple to grow despite the headwinds. "The high-end has proven relatively resilient during the recession, while promotions and financing options have helped with affordability," Bjorhovde noted. Going forward, there will be increasing tensions throughout the entire smartphone supply chain as demand weakness will likely continue for an extended period."The market is experiencing exceptionally challenging business conditions. Vendors should improve transparency when working with component suppliers and channel partners in the following quarters," Zhu said.
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