As we enter the last month of the third quarter, Apple's highly-anticipated annual product launch event is on the horizon. With the iPhone 15 Pro Max set to be equipped with a periscope lens for the first time, the market hopes that this massive camera upgrade will have a positive impact on smartphone production and sales.
Observing the July revenue performances of optical industry leaders Largan and GSEO, both companies have seen a clear bounceback in their operational performance due to increased demand for Apple's new products. Sources familiar with GSEO pointed out that the introduction of new smartphones and VR headset products from major US brands is expected to drive the company's operations.
Uncovering the three major factors behind the sluggish smartphone production and sales
GSEO's July revenue saw double growth, with a monthly growth rate of 85.71% and a YoY growth rate of 10.38%, a record high for July in recent years. This has raised market expectations. If customer demand remains steady and factory production can proceed smoothly, there is a possibility that both the August revenue and third-quarter gross margins will continue to increase.
GSEO chairman Jones Chen previously stated at a shareholders' meeting that the market would enter its peak demand season in the second half of 2023. Revenue performance is expected to be better than the first half. The goal is for the annual revenue of 2023 to surpass the NT$19.215 billion figure achieved in 2022.
However, industry sources in the smartphone sales sector pointed out that after a nearly 20% YoY decline in global smartphone production in the first quarter of 2023, production continued to decline by around 5-6% in the second quarter. In the first half of 2023, smartphone production reached 520 million units, a 13% decrease compared to 2022, and a new low for the past near-decade.
Industry insiders attributed this sluggish performance to several major factors. The first is that the demographic dividends of the emerging Indian market have not been utilized effectively.
Secondly, brands in 2022 were heavily burdened by excessive inventory on the channel side. Previously, it was anticipated that as inventory cleared up, brands would return to normal production levels. However, consumers have been more conservative with their spending due to a sluggish economy,
Lastly, the demand from a post-pandemic-lockdown China has not met previous expectations. All of this contributed to a lower-than-expected smartphone sales performance in the first half of 2023.
GSEO no longer focuses solely on smartphones
The non-smartphone sector is actually what GSEO has been focusing on in recent years. In 2023, related revenues are expected to account for over 10% of the company's overall revenue, which is a 100% growth compared to 2022. Jones Chen previously expressed optimism about the future development of sensing technology.
GSEO GM Lee Kuo explained that the specialized optical component the company ships is a part of sensor applications. It can be applied to wearable devices such as smartphones, smartwatches, and headsets. They also hope that special optical components for sensing and devices like VR will drive their operational momentum.
It's reported that there's a strong connection between specialized optics and VR. There are plenty of optical applications involved, including distance detection, eye tracking, hand gestures, and the surrounding environment. All of this represents business opportunities. However, the difficulty of researching and developing these lenses is even greater than past smartphone camera products. Chen stated that the company's continued focus will be on the medical sector, as it has a lot of business potential.
Article translated by Jack Wu
