An Apple supplier has warned of a significant drop in smartphone demand as we approach the holiday shopping season. Corning, the Apple supplier that makes glass for the iPhone, says it has seen weaker-than-expected demand for smartphones. The company now expects smartphone sales to fall 12% in 2022 compared to 2021.
For the fourth quarter, Corning expects sales of $3.55 billion, below analysts’ consensus of $3.75 billion. according to CNBCCorning will wait to see positive signs before telling investors about the future recovery in the business.
But for the quarter ending in September, Corning said it saw sales of smartphone units fall 14% year over year. Demand for tablets and laptops has also fallen, according to Corning, with a 17% drop. In all, Corning’s Display Technologies division is down 28% in terms of sales.
Throughout the year, Corning CEO Wendell Weeks said:
“We now expect smartphones to decline about 12% for the year, and we expect demand for laptops and tablets to fall by 15%,” Weeks said. “We expect the annual decline in smartphones, laptops and tablets to be larger in the second half than in the first.”
But there’s a major factor to keep in mind: Corning doesn’t just make parts for Apple. The company works closely with a number of other smartphone manufacturers, as well as other tablet and laptop companies. For example, Samsung is one of its largest customers outside of Apple.
This means that the decline in demand and sales cannot be entirely attributed to Apple. In fact, Apple may already be ramping up the numbers and helping to offset more significant declines affecting other companies. Unfortunately, we don’t know the full story here because Corning doesn’t separate its data on a company-by-company basis.
Apple has also invested in Corning as part of the Advanced Manufacturing Fund. In total, Apple has invested nearly $500 million in the company to help Corning develop a flexible and durable ceramic glass, which debuted as a glass cover on the iPhone 12.
CNBC It also indicates that there is a belief that this slowdown in smartphone sales will not affect the high-end side of the market as much as it will affect lower-end devices. This would bode well for Apple, which makes some of the most advanced smartphones on the market.
Apple is scheduled to announce its financial earnings for the fourth quarter of 2022 on Thursday.
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