Sony's COO predicts a slow recovery of smartphone demand this year

Hiroki Totoki, chairman of Sony Group Corp. and the company's president and chief operating officer has forecast that the smartphone market will remain depressed for the next year.

As the world's top smartphone image sensor maker, Sony has an insider's perspective on device inventories as well as the peaks and troughs of demand among the world's top smartphone manufacturers. Totoki said there are certain pockets of built-up oversupply that will add pressure to already stretched handset makers in particular, as the company released its quarterly earnings Friday, offering a very conservative outlook for its own performance and the global economy.

‍

"It is our belief that the smartphone market will not perform well in this year's economic environment," Sony's executive said during a call with analysts and investors. "We expect that as a result of piled-up inventory by competitors, prices of low-end and midrange image sensors will fall a great deal in China in the coming months due to excessive inventory levels in distribution channels."

‍

‍

Sony is expecting the market in Europe to slow down, and the Chinese market to be very uncertain, and it also expects premium handset sales to soften in the United States. During the past fiscal year, Tokyoki has increased its share of the global smartphone image sensor market from 44% to 51%, an increase of 12 percentage points from the previous year.

‍

The smartphone market in China, which is still the biggest in the world, has been experiencing double-digit declines for most of last year, and the downward trend has continued through the first three months of 2023. Despite China's lifting of the strict Covid Zero restrictions on movement and regular business activity, the latest statistics show a drop of 11% despite the lifting of the strict restrictions.