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Smartphone, tablet pile-up may lead to grim Q1 for suppliers

Smartphone Tablet Shipments Q1 2013

Smartphone sales were explosive in 2012 and the tablet market finally came into its own after being a one-horse town since 2010. Market leaders like Apple (AAPL) and Samsung (005930) are expected to post massive results in the fourth quarter and shipments from smaller vendors have continued to grow as well, but questions surrounding how long these runs can last continue to be raised. To compound the issue, vendors may have been too aggressive with recent orders; in a new report from Digitimes on Wednesday, the site’s unnamed industry sources suggest overzealous smartphone and tablet vendors may have caused a pile-up as 2012 draws to an end, leaving the first-quarter in question for a number of suppliers.

Smartphones and tablets have seemingly flooded the market faster than end-users bought them over the past few months, leading to a pile-up that may see orders moving into the first quarter reduced beyond what the industry might expect from typical seasonal cuts after the holidays. Digitimes says the issue is particularly bad in China.

Orders began to slow down in November according to the report, and original device manufacturers in the Far East have yet to begin building up component inventories as a result. Digitimes says supply chain companies are now “conservative about their business outlooks for the first quarter of 2013 as demand for [integrated circuit] parts has been affected” by the back up.

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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