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Smartphone Demand Recovery Unlikely This Year, Sony COO Says

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Vlad Savov and Takashi Mochizuki
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(Bloomberg) -- The smartphone market is likely to remain depressed for the next year, Sony Group Corp. president and Chief Operating Officer Hiroki Totoki said.

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Tokyo-based Sony is the world’s leading provider of smartphone image sensors and has a direct view on device inventories and demand among the world’s leading manufacturers. The company offered a very conservative forecast for its own performance and the global economy after reporting earnings Friday, and Totoki said there are particular pockets of built-up oversupply that will put pressure on already strained handset makers.

“We are not optimistic about the smartphone market outlook this year,” the Sony executive said on a call with analysts and investors. “In China, handset inventories in distribution channels increased in March, and we expect prices of low-end and midrange image sensors will fall a lot due to piled-up inventories by competitors.”

Sony expects a slowdown in Europe, a high degree of uncertainty in China and also sees softness in premium handsets in the US. Totoki said the company had increased its share of the global smartphone image sensor market to 51% over the past fiscal year, from 44% earlier.

China’s smartphone market, still the biggest in the world, went through double-digit declines for most of last year and extended that downward trend in the first three months of 2023. The latest figures showed an 11% drop even after China’s scrapping of strict Covid Zero restrictions on movement and regular business activity.

Read more: Sony Casts Doubt on PlayStation Momentum With Cagey Outlook

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