(Bloomberg) -- Sony Group Corp., the dominant supplier of camera sensors for smartphones, is pushing back expectations for a smartphone market recovery to 2024 at the earliest after gauging worsening demand from China and the US.
The electronics and entertainment conglomerate, a key supplier to device leaders including Apple Inc., had earlier expressed confidence in a second-half bounce-back in global phone sales. It joins Apple and other tech companies that in recent weeks have warned of persistently sluggish demand as China struggles to reboot its post-Covid economy and inflationary pressures weigh on spending elsewhere.
Sony is the world’s largest supplier of the sensors that underpin cameras in the iPhone and other devices. The Japanese company on Wednesday raised its full-year revenue and income outlook, though it credited gaming and entertainment and warned the smartphone market remained depressed. Those comments came as major customer Apple faces its longest sales slump in decades, hurt by an industrywide slump that sapped demand for phones, computers and tablets.
“The recovery of the smartphone market in China is slower than we expected and conditions in the US market are worsening,” Sadahiko Hayakawa, a senior general manager for finance, told analysts at a briefing. “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.”
Manufacturing yield issues for Sony’s camera sensors had posed a challenge for iPhone 15 production, Bloomberg News previously reported.
“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.”
Read more: Sony Lifts Outlook on PlayStation Strength Amid Global Headwinds
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