Guo Mingyi: almost all Android brands face the risk of high inventory, and the most serious problem is the processor.

Thanks to CTOnews.com netizen Colorful M for the clue delivery! CTOnews.com February 13 news, Tianfeng International analyst Guo Mingyi said recently that the most serious problem in Xiaomi's component inventory (equivalent to about 2000-30 million mobile phones) is the processor, supplied by MediaTek and Qualcomm (Qualcomm).

Guo Mingyi said that almost all Android brands face high inventory risks due to weak demand, not just Xiaomi. For Samsung, for example, the brand's global mobile phone inventory (the sum of terminals and components) is not expected to fall to a reasonable level until June.

Mr Guo also said that for bargaining Android component suppliers, inventory could be transferred to brands and agents / dealers because of supply contracts signed when supply was in short supply in 2020-2022. However, while this will allow inventories to be revised to a reasonable level in the short term, high inventories of brands and agents / dealers may lead to weak demand for components in the coming quarters.

Mr Guo said that because of weak demand from brands or agents / dealers for components, even if inventories fell to a reasonable level, they would generally face the challenge of a YoY (growth rate) decline in shipments in at least the next 6-9 months, which could be detrimental to share price performance. Due to changes in industrial structure (such as a decline in market share caused by the entry of new competitors), some parts suppliers still face the challenge of medium-and long-term growth slowdown or recession even if future demand improves as a result of economic recovery.

CTOnews.com noted that just three days ago, Guo Mingyi pointed out that Xiaomi smartphone shipments in 2023 are likely to be lower than market expectations, and Xiaomi inventory is as high as 12-16 weeks, indicating that the market is still too optimistic about the recovery of Xiaomi / Android phone shipments.