After a shaky report of Apple Inc, investors are wondering the prospect of the smart phone market. Asian suppliers hint that it is going to get worse before it gets better. Three suppliers who usually work behind the scenes to make devices sold under the brands of better-known customers, gave out continous earning report on Tuesday, that demonstrates trouble ahead for smartphone makers and other companies that once thrived on mobile mania. Usually these suppliers rarely catch much attention.
Pegatron Corp, a company that assembles iPhones did not get the profit that they expected. They said sales dived 16 percent. Also Minebea Co, a company that manufactures LED lights for mobiles did not meet their estimated revenue and earnings. Lastly Japan Display Inc that supplies screens to Apple and others, said that the fall in profit is so fast that they will lose money in the financial year and therefore will have to suspend the dividend that they had earlier promised. On top of this, as analysts warned of rising competition Lenovo Group Ltd. saw a maximum fall in their shares compared to the last four year’s. Asian components makers often signal what’s ahead for giant companies, showed proof of deteriorating market in last 13 years.
Now some are getting themselves ready to face sliding sales, an unchained market-share competition and crumbling prices. Richard Ko, a Taipei-based analyst at KGI Securities Co said that the smart phone industry will continue to slow down this year and Competition will worsen and prices will likely continue to fall. Most of the somberness which is the phenomenal growth engine is now moving towards an epic shakeout. Today as smart phone is not a novelty many domestic brands are targeting the middle and low range buyers, who do not believe in upgrading their mobiles frequently.
