As we look at the global economic growth rates for 2022, one country’s GDP performance stands out: Vietnam. According to the International Monetary Fund (IMF), Vietnam’s estimated GDP growth rate for 2022 is 7%, compared to 2.6% in 2021, making it the most fast-growing country among the neighbouring countries.

Undoubtedly, the country’s impressive performance is largely due to the global supply chain’s migration to the country, driven by the COVID-19 pandemic and the trade war between the US and China.

Pandemic and Trade War as Catalysts for Supply Chain Relocation

Long before the supply chain’s recent move, Samsung had already made aggressive investments by allocating 60% of Samsung Galaxy phones’ production in Vietnam. As a result of that, Vietnam’s electronics manufacturing exports surpassed its largest industry, textiles, a decade ago.

Over the last couple of years, the increasing tension between U.S. and China’s lockdown during the pandemic has made the leading brands aware of the high geopolitical risks as well as the importance of supply chain diversification. These concerns forced them to vigorously re-evaluate the plan to move their manufacturing factories to Vietnam, mitigating the risks they are exposed to.

Laptops: The Last Piece of Puzzle

In this migration, Apple and Dell have been the most proactive brands. After Shanghai’s lockdown, Apple has chosen Vietnam as its second-largest production base for laptops, tablets, and TWS earphones. Luxshare has already attracted attentions for building an AirPod production line in Vietnam, but not until recently, the laptop OEMs in Taiwan have geared up for expanding their investments there: a couple days ago Quanta Computer just announced a $50 million investment to establish a Vietnamese subsidiary to produce MacBooks; Foxconn, another key supplier of Apple’s macbook, is reported to begin their trial run for macbook after an $9 billion investment in 2022 for capacity increase.

On the other hand, it is said that Dell had actively reviewed its suppliers and component sources before 2022 to ensure the stable supply for their bidding market in the North American. As Dell becomes more aggressive in shifting their production lines from China to other locations, suppliers such as Compal and Wistron have also been actively building laptop assembly lines in Vietnam for the past two years.

A flexible production model is on the horizon

In the past, most OEMs considered Vietnam as a backup due to the complex logistic management potentially caused by the relocation of production lines. However, given that the most complicated and rigid laptop supply chains have begun to move, it is generally believed that this represents a solid trend where Vietnam is almost set to take over China’s position.

According to TrendForce, Vietnam is projected to account for 5% of global laptop shipments by 2023, which marks a notable increase from less than 1% just a year ago, making the country the second-largest laptop production base after China.

However, from the perspective of supply chain risk diversification, brand customers demand production models that not only reduce over-concentration in China but also enable quick response to possible contingencies at each production base.

That means even if laptop production is concentrated in China and Vietnam, if there is an urgent situation, OEM factories’ production lines in other regions must be able to provide immediate support. Such production models will inevitably reshape the supply chain landscape moving forward.

(Photo credit: Freepik)

According to TrendForce’s latest research, global NB shipments are forecasted to drop by 5.8% YoY to around 177 million units. However, the downtrend in NB shipments is starting to moderate, and the projected figure for 2023 is expected to represent the lowest point before 2025. Currently, inventory corrections for components and whole devices are taking place in the global supply chain for NBs. Prices are also being cut substantially across sales channels, and PC OEMs have scaled back component procurements. There is a chance that the NB market will return to its usual cyclical pattern and show growth during 2H23, when back-to-school and holiday-related promotions are expected to boost device sales.

However, this scenario will depend on two factors. First, PC OEMs will have been able to effectively get rid of the existing stock of NBs belonging to the older generations during 1H23. Second, global inflation will ease as 2023 progresses. Currently, the IMF forecasts that the rate of global inflation will slide down to 6.5% in 2023, compared with 8.8% in 2023. Such development will help raise the consumer spending related to electronics. All in all, notable inventory corrections and the reduction of inflationary pressure will allow the NB market to leave the gloomy situation of 2022 and get back to upbeat state of quarter-to-quarter shipment growth.

Market Segments for Commercial and Consumer NBs Will Both See Decline in 2023, Chromebooks, Gaming NBs, and Creator NBs Will Become Main Demand Drivers

Looking at the various segments of the NB market, unit shipments and market share are expected to drop for both commercial NBs and consumer NBs. Conversely, Chromebooks will grow in terms of shipments and market share despite various headwinds. In 1H23, mature regional markets such as the US and emerging regional markets such as Indonesia and India will be releasing tenders for Chromebook for educational uses. Turning to gaming NBs, their global shipments are forecasted to increase by 8.3% YoY to 17.45 million units for 2023 thanks to the seasonal demand surge in 2H23. As for creator NBs, the market for them is growing because professional content creators want to purchase a “mobile workstation” in place of a high-end gaming NB for tasks such as building 3D models and processing large amounts of multimedia files. Global shipments of creator NBs are forecasted to rise by 24.9% YoY to around 437,000 units for 2023.

(Note: “NB” stands for notebook or laptop computer.)

Smart watch shipments reached 107 million units in 2021, surpassing the shipments of smart bands for the first time. Smart bands declined in 2021 with only 70.33 million units delivered. As branded manufacturers strengthen their investment in the smart watch market, market growth has accelerated. Due to the proximity of functional applications, the smart band market has been gradually supplanted by low-cost smart watch products. Therefore, driven by new products in 2022, the current forecast indicates that smart watch shipments will continue to grow in 2022, reaching 119 million units, for an annual growth rate of 11.4%. Smart band shipments are expected to decline to 55.18 million units and the gap between the two continues to widen. It is worth noting, although branded manufacturers are optimistic regarding the development of the smart watch market, in light of risks such as the COVID-19 pandemic, war, and inflation, continuing downward revisions of smart watch shipment volume in 2022 cannot be ruled out and annual growth rate may even fall below 5%.

The top five major manufacturers of smart watches are Apple, Samsung, Huawei, Xiaomi, and Garmin with a combined market share of 63%. Apple Watch shipments reached 36.6 million units in 2021, with an annual growth rate of 20%. Apple is optimistic regarding the market in 2022. On the one hand, the company believes that the Watch Series 8 can maintain the same consumer interest as the Watch Series 7. On the other hand, a wave of entry-level product replacements is expected with the launch of the second-generation Watch SE. Coupled with the launch of new Pro products, Apple believes that market demand in 2022 will surpass that in 2021 and shipment volume is expected to reach 43 million to 46 million units.

However, considering the negative economic impacts following the wake of the COVID-19 pandemic and inflation, 4Q22 holiday sales may not pan out as expected. Throwing in the wildcard of China’s lockdown strategy, production of new Apple Watches may be affected if lockdown measures reappear in 2H22, which will lead to a risk of further delays in shipments of new products, upsetting shipments in 2022. Therefore, shipments of Apple Watches are conservatively forecast to reach 39.1 million units in 2022.

Although Samsung began exploring the wearable device market very early, due to the small market size and the rapid growth of the smartphone market, smart watches were not the focus of Samsung’s product development at the time. This was true up until recent years. As the growth of smartphones slowed, Samsung has once again strengthened its distribution of other consumer electronics products which has led to continuous growth in Samsung Galaxy Watch shipments. In addition, since Huawei has been flattened by Sino-US trade friction, Samsung leaped to claim the number two spot in the smart watch market in 2021. Samsung smartwatch shipments are estimated to grow from 11.09 million in 2021 to 14.1 million units in 2022.

After Google officially acquired Fitbit, although Fitbit remains nominally an independent brand, internal reorganization is bound to be carried out considering this affords more efficient resource allocation, integrating the companies’ procurement, product development, etc. Google will have two smart watch brands, Fitbit and Pixel. In terms of high-end watches, the Pixel Watch is a flagship product positioned as an extension of the Pixel mobile phone and is primarily used in synergy with smart phone functionality. Therefore, the Pixel Watch uses the Samsung Exynos chip and it is expected to highlight the features of various apps in the Google Play Store. Since Fitbit was acquired by Google, it has become necessary to adjust unified strategy and integrate and reorganize resources. Although smart watch shipments resumed growth in 2021, there is some distance between leading brands. Fitbit Is expected to launch new products in 2H22. Google Pixel Watch is also expected to be launched in 2H22, so Google/Fitbit smart watch shipments are estimated to grow to 3.65 million units in 2022.

（Image credit: Pixabay）

According to TrendForce research, global smartphone production volume in 1Q22 was 310 million units, a QoQ decrease of 12.8%, primarily attributed to ongoing inventory adjustments in various distribution channels performed by a number of brands and the cyclical off-season, which led to relatively weak production performance in 1Q22. In 2Q22, a resurgence of the pandemic in the world’s largest consumer market, China, exacerbated the drop in global 2Q22 mobile phone production to 309 million units. However, compared to the same period in 2021, when a resurgent pandemic in India and Southeast Asia caused a sharp drop in total production, mobile phone production grew slightly by 0.7%.

TrendForce further indicates that the war between Russia and Ukraine continues to exacerbate the rising global inflation issue. High inflation means that personal disposable income will shrink and will inevitably lead to prolonged replacement cycles and reduced purchasing budgets for individual devices. Summarizing 2022, corrections in 1H22 were primarily due to the impact of China’s lockdowns on the economy while corrections in 2H22 highlight the inflation crisis. The total production forecast for the entire year will be revised down to 1.333 billion units and there is still room for downward revisions in the future.

Due to China’s economic headwinds, shipments fall again to 283 million, an annual decline of nearly 13%

From a regional perspective, due to China’s insistence on maintaining a strict “dynamic zero-COVID” policy and the recent festering of the pandemic, economic performance is also facing greater downward pressure and the demand for smartphones has likewise cooled in the face of pandemic prevention measures. Overall, the sales market share of China’s smartphone market still ranks first in the world but, due to the impact of the pandemic, its market share has dropped from 24.2% last year to 21.1% this year while the corresponding total shipment forecast fell from 325 million units last year to 283 million units, an annual decline of approximately 12.9%. Although the impact of the pandemic in the remainder of the region has been comparatively blunted, in the face of a rising inflation crisis, even the overpopulated Indian market will be unable to support substantial growth. From the perspective of the 2022 national shipment share ranking forecast, the top three positions will be held by China, India, and the United States, accounting for a 21.1%, 13.1%, and 11.0% share, respectively.

(TechNews) Following Apple’s inclusion of the iPhone 6 Plus on its list of obsolete products in February this year, the iPad Air 2 and iPad mini 2 have also recently been added officially, making it difficult to obtain official repair services for these products in the future.

The iPad Air 2, launched in October 2014, was  Apple’s first iPad Air with Touch ID recognition and utilized the A8X processor. As for the iPad mini 2, which was launched in November 2013, it utilized the same A7 processor as the iPhone 5s, along with the M7 motion-sensing co-processor.

Apple mostly considers products that are 5 to 7 years old as outdated. The iPad Air 2 and iPad mini 2 have already exceeded this lifespan and it is quite reasonable to deem these products obsolete.

However, the inclusion of a product on the obsolete list does not mean that the device cannot be used. If consumers have maintenance requirements, it will depend on whether the company has replacement parts in stock. If there are missing parts, Apple will not repair this product for users.

(Source: https://technews.tw/2022/05/05/bye-bye-ipad-air-2-ipad-mini-2/)