Why Taiwanese earthquakes are spelling disaster for smartphone manufacturers

So as far as mobile phones are concerned, this year sales have finally 'peaked'.

What does the word mean though? It apparently means that 2 BILLION phones were shipped this year- both smartphones and feature phones, and as far as sales go, the only way is down from here on.

And this isn't just us speaking... It is the guys who run and conduct polls and then collate results and run them through algorithms to bring us the distillation from the complex web of numbers and such. 

CCS Insight expects that in 2016 shipments of mobile phones will actually fall from their levels last year by 1.3 percent, with most markets bar China experiencing a difficult year.

However, China is charting its own course in these murky waters. Sales have been going against trajectory and following 'weak sales' in 2015, things are meant to be looking better this year with it to continue accelerating until 2020.

Marina Koytcheva, Director of Forecasting at CCS Insight, noted, "After years of analysts and commentators talking about mobile phone market peaking within the visible horizon, it has now reached that point". 

However, we digress, the most interesting piece to this is the fact that owing to earthquakes in Taiwan, it is going to get a whole lotta difficult for newer manufacturers and those who produce handsets for the mid to low range of the market.

You see, production of smartphone components have been deeply affected and there is also a shortage of screens, camera modules and memory in the market so heavies like Samsung, Apple and Huawei have the advantage of scale to smaller manufacturers who are faced with near-empty shelves and a shopping list as well as a reported rise in the price of components for the first time in years. 

Koytcheva continues, "As growth is depleting, competition is intensifying and it comes as little surprise that margins are being squeezed harder than ever. Companies without the scale advantages of manufacturers such as Samsung, Apple or Huawei will find it much harder to make money."

Small to medium manufacturers are feeling the pinch because whatever resources are left are commanding a higher price and the bigger manufacturers snapping up all available output. Manufacturers who do not profit as much as the likes of Apple (iPhone 7 costs $225 to manufacture and sells for more than £599) from phones will be the ones to be squeezed out of the market. There might not just be fewer number of handsets but they will also be forced to curtail marketing and advertising spend, pushing them further into a corner.

However, if it is a bigger manufacturer, it gives them a very handy and important advantage in a already very divided market.

And all because of a set of natural disasters in Taiwan.

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