The latest mobile phone forecast from CCS Insight suggests that smaller manufacturers are set to face a battle as margins will be squeezed harder than ever.
The analyst companyâs global forecast found that the smartphone market has peaked at around 2 billion unites per year and these results support Deloitteâs findings which also suggested that the market has peaked.
CCS Insight said that the trend looks especially troublesome for smaller mobile phone makers as scale would be more and more important.
Director of Forecasting at CCS Insight, Marina Koytcheva, said that as growth is depleting, competition is becoming more intense and it is not surprising to see margins being squeezed harder than ever before.
She added: Companies without the scale advantages of manufacturers such as Samsung, Apple or Huawei will find it much harder to make money.
After years of analysts and commentators talking about mobile phone market peaking within the visible horizon, it has now reached that point.
CCS Insight also predicted that there will be price hikes in the cost of components in the second half of this year âstemming from shortages of screens, camera modules and memory.â
The analysts also explained that these issues have come as a result of a combination of the biggest names snapping up all available output and recent earthquakes in Taiwan that have disrupted production.
Koytcheva also warned that this would make things even tougher for the smaller brands, adding; This is the first time we have seen component price rises for years. Phone makers with low volumes will find it almost impossible to turn a profit in these conditions without raising the prices of their products. It is a great opportunity for the big players like Huawei and Samsung to exploit their scale, apply pricing pressure and strengthen their leading positions.
