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TOKYO: Murata Manufacturing Co expects this year’s drop in smartphone sales to keep going well into 2023, led by a sharp downturn in China.

The company’s outlook has dimmed dramatically from a quarter ago, when it looked forward to a bounceback in Chinese demand after the end of Covid-19 lockdowns in major cities.

Consumers in the world’s biggest smartphone market haven’t responded with a spending spree and Murata sees little prospect for a rally over the next year, president Norio Nakajima told Bloomberg News.

“The momentum will not come back at least during fiscal 2022 and the situation is not that positive going into the next term,” Nakajima said.

“Demand for consumer electronics has dropped drastically and these Chinese makers are not feeling well.”

Kyoto-based Murata is a linchpin of the smartphone industry, providing electronic modules and components for Apple Inc’s iPhones, Samsung Electronics Co’s Android devices and China’s leading device makers.

Its shares have slumped more than 20% this year as key customers have weathered double-digit declines in shipments, especially in China.

“Consumers might have been willing to buy new phones even with small upgrades if the economy were in a better shape,” Nakajima said, pointing to interest rate hikes by central banks around the world as a big factor. “What I’m afraid will happen is smartphones get further commoditised and people will wait even longer before upgrading.” —Bloomberg


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