Major Apple supplier sees weakness in smartphone sales continuing until 2024

Next to smartphone manufacturers themselves, who would have the best idea of how well these devices are selling? Actually, the answer to that question would be smartphone manufacturers' suppliers since they receive orders for components that ebb and flow depending on sales forecasts that come from companies like Apple, Samsung, and Google. And one of Apple's major and well-known suppliers says that smartphone sales will not grow during the remainder of this year.

Sony supplies Apple with all of the camera sensors used on the iPhone. It is also the largest supplier of camera sensors to the industry. Previously, Sony said that it expected the smartphone market to rebound during the second half of the year. But per Bloomberg, the company has changed its mind pointing out that smartphone sales are slowing down in China, the world's largest smartphone market. In the U.S., which is the third largest smartphone market (with India at number two), sales are getting worse, according to Sony.

Speaking to analysts, Sadahiko Hayakawa, a senior general manager for finance at Sony, said, "The recovery of the smartphone market in China is slower than we expected and conditions in the US market are worsening. We had expected the smartphone market to start recovering from the second half of this fiscal year, but now we expect that would not happen until at least the next year."

The company now is expecting not to see a recovery in the industry until 2024. Even though Sony did hike its full-year outlook for revenue and income, the improvement is coming from gaming and entertainment while the smartphone business continues to struggle. And while the company is the leading supplier of camera sensors for connected handsets, one analyst blamed issues that Sony has been having with low yields in this sector.

Even Wall Street has become concerned with the problems in Sony's camera sensor business. "The image sensor arm is a big concern. The business is getting a lofty tailwind from exchange rates, yet the unit hasn’t been able to make profits," Morningstar analyst Kazunori Ito said. "We need to pay close attention to the unit going forward."