Recently, mobile phone brands such as Redmi, Black Shark, and vivo have released their new spring mobile phones, and Apple has also put two new iPads on the shelves without warning, which has left everyone stunned. Despite the launch of new products one after another, the enthusiasm of the end consumer market seems to have failed to restart as expected. At this stage, the products are not attractive enough, and consumers are actively waiting to see the arrival of new hotspots such as 5G and flexible foldable screens.

Global smartphone sales are sluggish, with upstream suppliers bearing the brunt. Industry insiders pointed out that as demand for mobile phones shrinks, giants like Apple may be able to maintain profit growth by raising prices and transitioning to software services, but suppliers have no way out. If the original mobile phone manufacturers cut component orders or delay shipments, suppliers are likely to be stuck in the predicament of inventory backlog. Therefore, upstream suppliers rely more on mobile phone market sales than mobile phone manufacturers.

From the perspective of the industry, iPhone sales are sluggish, and its suppliers urgently need to break through. And their first goal is a domestic mobile phone brand with huge incremental potential.

According to data from the China Academy of Information and Communications Technology, in 2018, the overall domestic mobile phone market shipped 414 million units, of which the total shipment share of TOP5 manufacturers increased by 13 percentage points over the previous year to 84%. More importantly, the consumption level of the domestic mobile phone market is gradually shifting to the high-end. In 2018, the average price of mobile phones in the domestic market was 2,523 yuan, and the share of 4,000 phones and above, 3,000-4,000 yuan, and 1,000-1,999 yuan price range increased significantly. The analysis pointed out that the increase in the price of mobile phones is mainly driven by the increase in the cost of components, such as the replacement of chips, the rise of screens from LCD to LED, and the number of cameras from single to multiple.

As a result, in the context of the decline in Apple's iPhone sales, as the Android camp represented by Huawei, Xiaomi, OPPO, vivo, etc. will become stronger and stronger, Apple's suppliers have transformed and sought changes, showing that major customers in the above-mentioned Android camp have demanded Trend of orders. The Android camp brings an increase in orders, which can make up for the loss caused by the reduction of existing orders.

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According to Taiwanese media sources, a number of Apple suppliers, including chip foundry TSMC (TSMC), are working on diversifying their order channels. TSMC's OEM production of Apple's A-series processors is naturally "troubled" by the new iPhone production reduction plan. The company warned that its growth will slow in 2019.

However, this does not affect TSMC's busy green status. On the one hand, in addition to Apple's A12 chipset, Huawei's Kirin 980 chip using a 7nm process has begun mass production and commercial use. This chip is also foundry by TSMC. And the Huawei Mate 20 series and Honor Magic 2 series equipped with this chipset have been released, and it is not ruled out that Huawei's subsequent new models will use this chip.

At the same time, from the first quarter of 2019, TSMC has been busy mass-producing the Qualcomm Snapdragon 8150 chipset on the 7nm process. This is significant because many Android devices use Qualcomm's modem chips and Snapdragon processors, and these Android manufacturers are currently waiting for Qualcomm's 7nm chip solution. If Qualcomm's 7nm chipset starts mass production, the demand will inevitably increase, which is regarded as one of the signals that TSMC is turning to the Android camp.

On the other hand, Largan, an optical lens designer and manufacturer that supplies fingerprint recognition lens modules and 3D-sensing lenses for iPhones, is seeking orders from Samsung Electronics Co, Huawei and Xiaomi. In 2018, the company's earnings per share remained high at $5.90 even as its profits fell.

The source also said that two of Apple's key foundry partners, Foxconn and Pegatron, are also trying to attract more non-Apple external business.

So, how should suppliers seek change? The first is to try to cut more pieces of the original cake; the second is to extend upstream and downstream to extend the product line; the third is to expand the application field of the product.

Suppliers should increase investment in research and development, and technology should keep up with the development trend of terminals, and extend to the high-value core parts and components upstream of the industrial chain; or cut into new industrial chains with larger market space. For example, Sunwoda has entered the field of mobile phone batteries, while expanding the fields of new energy vehicle batteries and powertrains; Oufei Technology relies on innovative products such as dual cameras and triple cameras to serve new products in more segments. Clients etc, these are very effective advance layouts.