Based on a recent analysis by TrendForce, LG Display is encountering a challenge with its supply of 6.7-inch panels and chassis for the iPhone 15 Pro Max. The issue revolves around tolerance, leading to the development of a growing dark spot (GDS) once the components are assembled. Unfortunately, this problem has hindered the successful passage of quality verification tests. Consequently, LGD’s production timeline is anticipated to face a one-month delay, awaiting the resumption of shipments following the completion of revalidation later this month. To manage the reduced panel supply during this interim period, Samsung Display (SDC) will step in and provide supplementary support.

From the standpoint of downstream assembly facilities, the adjustments in supply have the potential to impact production operations in Zhengzhou for approximately two weeks. It’s projected that by ramping up production subsequently, these effects can be mitigated.

On a different note, BOE has successfully achieved its goal for this year by participating in the development of panels for both the iPhone 15 and 15 Plus. However, owing to recent quality concerns necessitating mask adjustments, they might encounter a significant decrease in shipments. Simultaneously, since SDC is a key supplier for these two new models as well, they will step up to fill the void created by BOE’s supply shortfall.

Taking a historical perspective on BOE’s involvement in supplying iPhone panels, their journey began with the iPhone 12, providing components for repairs, and subsequently transitioning into regular supply for the iPhone 13. Their prowess in LTPS and OLED technology has been acknowledged. However, with the introduction of the iPhone 15 and 15 Plus models, which incorporate the Dynamic Island design featuring a center-hole punch, the demands placed on the panels have become more stringent. The alteration in mask design is likely a pivotal factor that requires additional time for BOE to optimize panel yield and quality.

TrendForce underscores that the issue pertaining to panel quality only marginally affects the overarching shipping schedule for the iPhone 15 series. Its main consequence lies in the reshuffling of panel suppliers, while SDC continues to assert its dominance as the primary supplier of new model iPhone panels this year, accounting for nearly 70% of the market share.

According to a report by Taiwan’s Economic Daily, the revival of the smartphone market has fallen short of expectations. Industry sources have indicated that in order to stimulate customer demand and expedite inventory clearance, Qualcomm has recently initiated a price war, targeting mid- to- low-range 5G smartphone chips. The price reduction is substantial, ranging from 10% to 20%. It is anticipated that Qualcomm’s price reduction strategy will extend into the fourth quarter.

The consumer electronics market began to slump in the fourth quarter of last year. Downstream inventory levels began to visibly dissipate in the first half of this year, gradually returning to normal. There was optimism in the market that the Chinese smartphone market would improve in the second half of this year, and there were even reports of a slight resurgence in Qualcomm’s chip shipments during the second quarter.

However, even after China’s 618 shopping festival, the downturn in the consumer electronics market has not shown significant improvement. This has led to Qualcomm’s inventory levels rising to nearly two quarters’ worth.

With low order visibility and high inventory, the supply chain has reported that Qualcomm has recently decided to initiate a price war, primarily focusing on the mid- to low-range market segment. If the pace of inventory clearance falls short of expectations, there is a possibility of further intensifying the price reduction efforts.

Industry analysts suggest that Qualcomm’s extensive price cuts underscore the challenging situation in the mid- to low-range 5G smartphone market, where demand has been lackluster.

(Photo credit: Qualcomm)

Sony, a major supplier of Apple’s camera sensors, suggests weaker demand for the upcoming iPhone 15 due to a lackluster year for Apple’s iPhone sales. Economic challenges have affected iPhone sales, though service revenues have offset losses. The flagship iPhone 15 series is scheduled for a September release.

Sony the world’s largest sensor supplier, had previously projected a gradual recovery in its smartphone imaging and sensing business by the second half of 2023. However, during its latest earnings call, the company revealed that this recovery might not take shape until 2024, mainly attributing the delay to underwhelming sales in the Chinese market.

Sadahiko Hayakawa, Sony’s Senior General Manager of Finance, stated, “The recovery pace of the Chinese smartphone market has been slower than our expectations, and the situation in the US market is worsening. We originally anticipated the smartphone market to recover starting from the second half of this fiscal year, but our current assessment suggests that it might not happen until at least next year.”

Sony’s top brass attribute a cautious outlook to a sluggish global economy and geopolitical uncertainties, hinting at muted demand for the iPhone 15 series. This stance resonates with analyst Ming-Chi Kuo view at TFI Securities, forecasting that iPhone 15 might struggle to surpass iPhone 14 sales records, posing challenges to Apple’s suppliers in H2 2023.

Apple reported a 2.4% decline in iPhone sales for its third fiscal quarter, reaching $39.7 billion, slightly below analyst estimates of $39.9 billion. The US region saw a 5.6% year-on-year drop in sales, highlighting a performance that falls short of expectations.

(Source: https://news.cnyes.com/news/id/5282617)

In about a month’s time, the smartphone market is gearing up for Apple’s flagship iPhone 15 series of the year. This annual anticipation leads to a surge in online appearances of models for reference, typically emerging one to two months ahead of the new phone’s unveiling. TechNews, a Taiwanese tech media also acquired an accurate mock-ups mimicking upcoming iPhones, providing an advanced peek into the forthcoming changes in this year’s iPhone 15 series.

• Maintaining 4 Models, 2 Sizes

Similar to last year’s iPhone 14 series, Apple is projected to release 4 models in 2 sizes this year. These include the 6.1-inch iPhone 15 (which some suggest might grow to 6.2 inches) and the iPhone 15 Pro, along with the 6.7-inch iPhone 15 Plus and iPhone 15 Pro Max (which could potentially be renamed iPhone 15 Ultra).

• Entire Series Adopts Dynamic Island

Dynamic Island design made its debut in last year’s iPhone 14 Pro series, while the iPhone 14 and iPhone 14 Plus retained the traditional notch design. However, even the more affordable iPhone 15 variant will undergo a change, syncing with the Pro version by replacing the notch with a dynamic island design.

Notably, due to the adoption of the dynamic island design for the iPhone 15, some speculate that the screen size might marginally expand to 6.2 inches this year.

• All 4 Models Get a ‘Port’ Change

In response to EU regulations, rumors in the market suggest that Apple is set to switch all models in the iPhone 15 series from the previous Lightning port to the USB-C charging port. From the obtained muck-ups, it appears certain that the entire iPhone 15 series will indeed transition to USB-C ports.

• Larger Camera Modules, Slight ‘Slimming’ for Pro Models

Fitting iPhone 15 series muck-ups with protective cases designed for the iPhone 14 series reveals that, while all 4 models can accommodate iPhone 14 series cases, a closer examination of the camera reveals that the iPhone 14 series case slightly interferes with the lowermost lens.

Furthermore, this year’s iPhone 15 Pro series will have further narrowed screen bezels, down to 1.55mm from the previous 2.2mm. Consequently, the iPhone 15 Pro muck-up will be slightly slimmer than their iPhone 14 Pro predecessors, resulting in a slightly looser fit when encased.

Other Speculations

The information provided by the muck-ups remains limited, leaving us to wonder about potential additional changes to this year’s iPhone 15 series.

As expected, the iPhone 15 Pro series processor is likely to see an upgrade to the A17 Bionic chip (manufactured using TSMC’s 3nm process), while the more budget-friendly iPhone 15 and iPhone 15 Plus will possibly adopt last year’s A16 processor from the iPhone 14 Pro series (manufactured using TSMC’s 4nm process).

Regarding memory capacity, the iPhone 15 Pro series could see an upgrade from 6GB to 8GB, while the iPhone 15 and iPhone 15 Plus might retain 6GB.

Additionally, it’s rumored that the iPhone 15 series’ ultra-wideband chips will all be upgraded to U2 chips, with the manufacturing process transitioning from the previous generation U1 chip’s 16nm to a 7nm process; this is expected to enhance the energy efficiency performance through this improvement.

In terms of battery life, there’s speculation that the entire iPhone 15 series will adopt ‘stacked batteries’ to enhance endurance. The speculated battery capacities for the four models are as follows: iPhone 15 (3877mAh), iPhone 15 Plus (4912mAh), iPhone 15 Pro (3650mAh), and iPhone 15 Pro Max (4852mAh).

In recent times, Transsion Holdings, often referred to as the “African King” in the smartphone industry, has voluntarily disclosed a performance forecast on its official website. According to estimates from its financial department, Transsion is projected to achieve a net profit attributable to the parent company owner of approximately 1.58 billion Chinese Yuan (CNY) in the second quarter of 2023, marking a substantial 84% increase compared to the same period in 2022.

Perspective from TrendForce:

• Improved conditions in certain regional markets have facilitated Transsion’s growth, though the growth rate is approached with caution.

In contrast to most Chinese brands that primarily target the domestic market, Transsion has maintained a sales focus on overseas markets. Building on its pioneering advantage by being among the first to enter the African market, Transsion established its position as the market leader. To mitigate the risks associated with dependence on a single market, the company also expanded into emerging markets like India. This strategic approach has contributed to Transsion’s potential for profit growth this time.

Based on the disclosed information, Transsion attributes the increase in profitability primarily to improvements in emerging markets’ economic conditions, leading to increased product sales. However, from a market perspective, the internally estimated 84% growth rate might be based on a relatively optimistic scenario.

Further analysis suggests that the term “emerging markets” here likely refers not to the Middle East and Africa, which have historically represented a significant portion of Transsion’s revenue, but more likely points to the Indian market.

Despite adjustments made by the World Bank and the International Monetary Fund (IMF) in their economic outlooks for the Middle East and Africa, factors like high inflation in countries such as Turkey in the Middle East and Egypt in North Africa have weakened consumer purchasing power. In such an economic environment with declining growth, consumers are likely to feel pessimistic about their future disposable income, resulting in reduced non-essential expenditures such as buying smartphones.

In the case of the Indian market, it has benefited from an economic recovery following a slowdown caused by the pandemic, coupled with a trend of foreign investment shifting away from China as a manufacturing hub. Increased exports have driven GDP growth in India, translating to higher disposable incomes for consumers.

However, despite the seemingly promising outlook for India’s smartphone market, competition is fierce, with brands like Samsung and Xiaomi already occupying a significant market share. As a newcomer to the market, Transsion faces challenges in achieving substantial performance growth amid this intense competitive landscape.

• China remains the largest market for smartphones, indicating short-term market recovery remains challenging.

Transsion’s focus on expanding into overseas markets outside of China has opened doors for potential growth. When examining global smartphone revenue by regional markets, China still reigns as the largest single-country market, contributing nearly a quarter of the company’s revenue. However, a closer look at China’s recent macroeconomic performance reveals a youth unemployment rate surpassing 20%, reaching a staggering 21.3%.

Given the rising unemployment rate, it can be inferred that consumers may hold pessimistic expectations for their future disposable income. Moreover, as the smartphone market matures and innovation becomes scarce, the lack of growth momentum in China’s market suggests that the overall smartphone market may continue to struggle to recover in the short term.

(Photo credit: Transsion)