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

Updated 10 years ago
Published Dec 27th, 2012 8:00AM EST
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 Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.