Can The Second Quarter Of Consumer Electronics Rebound?

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In the first quarter, China's smartphone market fell, and the depressed mood pervaded the upstream and downstream of the supply chain. According to the latest monthly report on mobile phone sales released by counterpoint, the sales of smart phones in China decreased by 14% year-on-year in the first quarter of 2022, totaling 74.2 million units. The mobile phone trading volume in this quarter has been as low as that in the first quarter of 2020 affected by the severe epidemic.

Anxin securities has counted the median PE (TTM, excluding non recurring profits and losses) of consumer electronics companies, which is close to the lowest level in 40 months. Among them, in the first quarter of 2022, the net profit attributable to the parent of Android industrial chain enterprises was - 330 million yuan, a year-on-year increase of - 144.2%, and the net profit attributable to the parent of industrial chain enterprises was 7.62 billion yuan, a year-on-year increase of - 11.5%.

Although the consumer market is under pressure, the recent news that Foxconn has established connection points at the highway entrance for "point-to-point" recruitment shows that there is still a large gap in front-line production line workers. With the arrival of e-commerce promotion in the middle of the year, the labor gap in the consumer electronics supply chain may further expand.

OEM giant expressway "site" recruitment

In the latest fiscal quarter, Apple's revenue was $97.3 billion, an increase of 8.6% over the same period last year, its profit was $25 billion and its gross profit margin was 43.7%. Where, iPhone < a data link = "1" href = "" target = "_blank" > mobile phone sales reached US $50.6 billion, a year-on-year increase of 5.5%, and service sales increased by 17% to US $19.8 billion, both higher than the average expectation of analysts.

Although Apple's sales growth in Greater China slowed to 3.47% to US $18.34 billion, Foxconn, a global foundry that is an important support for apple, recently kicked off summer recruitment.

Hon Hai's main iPhone production base and Foxconn idpbg business group Zhengzhou plant began to start large-scale recruitment, which was significantly increased by 30% compared with the recruitment bonus at the end of April.

The reporter noted that the wechat official account of "Foxconn idpbg Zhengzhou Recruitment" released a message on May 2, indicating that job seekers who have been on the job for no less than 90 days and have been on duty for 55 days can receive a bonus of 8000 yuan, and recommenders can receive a bonus of 500 yuan.

In addition, Foxconn Zhengzhou factory opened a "point-to-point" closed-loop safe induction channel for job seekers in low-risk areas in the province for the first time.

It is understood that Foxconn Zhengzhou factory set the reporting location of job seekers 50 meters in front of the exit of the North toll station of Zhengzhou airport port area. The connection point has set up multiple areas according to the function. After getting off the bus and completing the health code registration, the job seekers are directly sent to Foxconn recruitment center by the connection car. The whole process from the completion of the interview to the nucleic acid detection and then entering the park is subject to closed-loop management.

Ivan Lam, senior research analyst at counterpoint, told China business that Apple benefited a lot from < a data link = "1" href = "" target = "_blank" > Huawei's declining sales. "Although Apple's sales declined from the previous quarter as the momentum of the iPhone 13 series began to fade, the iPhone 13 remained China's best-selling smartphone in this quarter. At the same time, the decline in Huawei's share also prompted China's leading OEMs to invest more resources in high-end areas."

Can folding screen mobile phones lead the market rebound in the second quarter

"Due to the impact of the epidemic and urban control in China, the sales volume in March also decreased by 3.5% year-on-year, the first decline since August 2020. These factors, coupled with the obvious downward trend in the demand of China's smartphone market before the new round of epidemic, have had a significant impact on the industry." Mengmeng Zhang, a research analyst at counterpoint, said demand for smartphones is expected to continue to decline due to low consumer confidence and a lack of innovation to stimulate consumers.

Despite the downturn in the market, the folding models launched by Android mobile phone manufacturers became one of the driving forces of the high-end market in the first quarter.

IDC, a market research firm, believes that the market attention of folding screen mobile phones rose again in the first quarter, and domestic brands made efforts to explore the high-end price market. From the perspective of product form, it has walked out of the differentiation route different from apple, which is the active exploration of domestic brands in order to continue to challenge the high-end market and establish the high-end brand image in the future.

From the specific sales volume of the brand, according to the data of the above institutions, the share of Huawei folding screen mobile phones is 49.3%, that of < a data link = "1" href = "" target = "_blank" > Samsung is 28.8%, that of < a data link = "1" href = "" target = "_blank" > oppo is 6.1%, and that of Lenovo Motorola is 2.4%.

From the perspective of new entrants, the oppo folding screen mobile phone find n sold 50000 units in two weeks after its listing, and the reservation volume of the whole network exceeded one million units. With the help of the hot sales of find n, oppo's market share of 7000 yuan + Android exceeded 8%, and has a further upward momentum< A data link = "1" href = "" target = "_blank" > vivo's x fold was also sold out on the first sales day. At present, < a data link = "1" href = "" target = "_blank" > jd.com adopts the product reservation system for delivery.

According to GfK data, in the field of folding screen, Google promotes the Layout Framework and optimization of adaptation, while Samsung promotes the product line to go hand in hand. Among Chinese manufacturers, Huawei started with the vertical folding screen, and the price continued to drop, while oppo continued to plough in the fields of horizontal scrolls and vertical scrolls.

"The price of folding screen has dropped to 7000 yuan and is reshaping the high-end market structure." GfK research data show that Samsung Z flip 3 and oppo Book find n have significantly promoted the sales of vertical and horizontal folding screen products. This year, the price of folding screen is expected to drop to 6000-8000 yuan, and the share is still growing rapidly.

Counter point data shows that in 2021, the global shipment of folding screens reached 9 million, with a year-on-year increase of 200%, which is much higher than that in the smartphone market. Although it will take time for the overall share of folding mobile phones to grow, folding mobile phones will account for 40% - 50% of the high-end market by 2025.

In addition, according to analysts, the technical trend of high-end mobile phones is also driving the recovery of demand for some components.

"The price of mobile phone devices is expected to stop falling in the third and fourth quarters." Chen Jun, deputy general manager and chief analyst of Qunzhi consulting, told reporters that the processing of consumer electronics inventory is coming to an end, and the pulling of goods in the peak season of the middle and high-end market of the year is also expected to bring a rebound in demand in the next stage.

Author / Li Na

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