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China market: Component order visibility feeble from some smartphone vendors for 1Q17

The visibility of component orders from some China-based smartphone vendors, notably Huawei, Xiaomi Technology and LeEco, for the first quarter of 2017 has become weak recently, according to sources from the handset supply chains in Taiwan and China.

Smartphone inventory levels in the China market have scaled up recently as sales growth of mid-range to high-end smartphones have been slowing down, forcing some vendors to pull in component orders slowly, said the sources.

Although Huawei claimed recently that shipments of its Huawei P9 devices have reached over 10 million units, the company's first model to reach that milestone, the vendor appears to have cut back its component orders for the first quarter of 2017, indicated the sources.

Huawei has seen its shipment volume and market share increase significantly in 2016, and therefore it will be difficult for the vendor to continue to enjoy high growth in the coming year due to keen market competition, commented the sources.

Xiaomi has been cautious over inventory controls recently as sales of all its lineups have been lower expected in the third and fourth quarters of 2016, and market sources expect the slack sales to continue in the first quarter of 2017.

LeEco has turned more conservative about the expansion of its smartphone business, due to its recent financial constrains. LeEco has reached new payment terms with component suppliers and will pay its accounts payables in installments, noted the sources, adding that component suppliers will also be cautious about shipping parts to LeEco.