By Li Panpan

With the sharp fall of mobile phone shipments in the first quarter of 2022 in China, industry insiders told JW Insights that the inventory now could be as high as over 50 million, posing increasing cash flow and other pressure to supply chain companies. 

While the reoccurring pandemic, the economic downturn, and the Russia-Ukraine war are the deep-rooted causes, the mounting inventory of smartphones in the Chinese market is dragging down shipments, said the JW Insights report. 

The shipment downfall of Xiaomi, OPPO, and Vivo in the first quarter is by 20%, 27%, and 30%, respectively, year-on-year, according to Canalys statistics.

IDC pointed out that lowered consumer budgets affected by the reoccurring pandemic and the small degree of new product upgrades have led to the sluggish demand for smartphones in China.

Sunny Optical(舜宇光学), the leading supplier of optical lenses in the Chinese market, predicted that the global smartphone sales in 2022 will decrease by 7.9% with the Chinese smartphone shipments reaching 260 million, a year-on-year decrease of 16.9%. 

Cash flow pressure is becoming a massive challenge for smartphone manufacturers. Other consumer electronics markets could be affected as well. 

Another industry insider said product shipments in the non-mobile phone field in June declined significantly from May. There might also be inventory pressure in the non-mobile phone field. 

Facing the challenges, Sunny Optical said it would expand overseas market, increase the R&D and mass production capabilities of core components like motors, and leverage its advantages in scale and cost competitiveness. 

Its plants in Vietnam and India achieved large-scale operations, improving its global operation capabilities. It will continue constructing its intelligent factory and develop XR and IoT business.