Omdia: Shipments of major terminal products in the first half of 2023 will only account for 46% of annual shipments

Key Points

According to the latest terminal shipment forecast data from Omdia Consumer Electronics & Devices, the combined shipments of major terminal products (smartphones/tablets/notebooks/monitors and AIO computers/TVs and outdoor displays) in 2023 will decline by 2% compared to 2022, and shipments in the first half of 2023 will only account for 46% of annual shipments. According to estimates by the Consumer Electronics & Devices research team, the third quarter of this year will see a 13% quarterly growth, and the fourth quarter of this year will maintain strong growth momentum to 12% quarterly growth.

The huge gap in shipments between the first and second half of 2023 can be attributed to the following two reasons:

Reason 1: The demands of various products are simultaneously affected by similar external environments:

The impact of the Russia-Ukraine war and the US Federal Reserve's interest rate hike (rapid changes in the US dollar exchange rate) on the demand for various products has led to the completion time of inventory adjustments for various products being similar, with most of them being completed between the second and third quarters of this year.

Reason 2: Major brands of each product adopt similar business strategies:

Amid the Russia-Ukraine war, the US-China geopolitical conflict, and the potential crisis in the global financial market, business operators are cautious about future demand, but are unwilling to lose market share of existing companies, resulting in inconsistencies between the terminal brands' forecasts for overall market shipments in 2023 and the terminal demand information received by the supply chain.

Therefore, for the outlook for the second half of 2023, the Omdia CE & Devices research team proposed three observation indicators:

Observation indicator 1: The trend of the US dollar exchange rate in the second half of 2023

The US dollar exchange rate will affect the cost pricing mechanism of end product components and the purchasing power of consumers in various regions around the world. If the US dollar continues to strengthen in the second half of 2023, not only will brands not have the urgency to purchase components immediately, but it will also cause a decline in purchasing power in some regions (for example, Europe).

Observation indicator 2: The impact of the Carbon Border Adjustment Mechanism (CBAM) piloted by the EU in October this year on operations and product design

The EU's Carbon Border Adjustment Mechanism (CBAM) in October this year will serve as the basis for the EU's carbon tax three years later. If the EU carbon tax is set based on the carbon footprint of products, it will force companies to change their business thinking from setting performance targets based on simple product shipments (sell-in) to setting business strategies, product designs, and organizational performance targets based on product life cycle thinking.

Observation indicator 3: The impact of corporate strategy transformation on supply and demand of supply chain

Faced with a sharp decline in terminal demand in 2022, some supply chain manufacturers have begun to adjust their business strategies (for example, Taiwan's panel manufacturers are expected to start shutting down some panel production lines this year); at the same time, as the epidemic eases, supply chain operators' plans for future manpower (moving out of China or continuing to increase local investment in China) and whether local manpower can smoothly return to the supply chain will also become potential problems for component supply in the second half of the year.

Source: Omdia