Global Smartphone Market Sees Growth after over 2 Years in October

People rest eating ice cream and reading their smartphones outside the GUM department store, enjoying a warm autumn day in Red Square in Moscow, Russia, on Wednesday, Nov. 1, 2023. (AP)
People rest eating ice cream and reading their smartphones outside the GUM department store, enjoying a warm autumn day in Red Square in Moscow, Russia, on Wednesday, Nov. 1, 2023. (AP)
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Global Smartphone Market Sees Growth after over 2 Years in October

People rest eating ice cream and reading their smartphones outside the GUM department store, enjoying a warm autumn day in Red Square in Moscow, Russia, on Wednesday, Nov. 1, 2023. (AP)
People rest eating ice cream and reading their smartphones outside the GUM department store, enjoying a warm autumn day in Red Square in Moscow, Russia, on Wednesday, Nov. 1, 2023. (AP)

The global smartphone market returned to growth in October after more than two years of slump, helped by a recovery in the emerging markets, according to data from Counterpoint Research.

The data showed that global monthly smartphone sell-through volumes grew 5%, making October the first month to record year-on-year growth since June 2021, breaking the streak of 27 consecutive months of negative year-on-year growth.

Global smartphone sales have been under stress for the last two years affected by various issues starting with component shortages, inventory build-up and lengthening of replacement cycles, Counterpoint said in its report.

"Following strong growth in October, we expect the market to grow year-on-year in the fourth quarter of 2023 as well, setting the market on the path to gradual recovery in the coming quarters," the market research firm said.

The growth, which was last seen in June 2021 coming from a COVID-19 induced pent up demand, has now been led by emerging markets with a continuous recovery in the Middle East and Africa, Huawei's comeback in China and onset of festive season in India, it added.

Huawei's China smartphone sales grew strongly in the third quarter, surging 37%, as shoppers snapped up its Mate 60 series phones.

The developed markets with relatively higher smartphone saturation have been slower to recover, the report said, but it cited the launch of Apple's iPhone 15 series as another factor for the growth.



Electric Vehicle Maker Nikola Goes Bankrupt

A member of the media stands behind a hydrogen-powered Artic truck at the booth of US truckmaker Nikola at the IAA Transportation fair, which will open its doors to the public on September 20, 2022, in Hanover, Germany, September 19, 2022. REUTERS/Fabian Bimmer/File Photo
A member of the media stands behind a hydrogen-powered Artic truck at the booth of US truckmaker Nikola at the IAA Transportation fair, which will open its doors to the public on September 20, 2022, in Hanover, Germany, September 19, 2022. REUTERS/Fabian Bimmer/File Photo
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Electric Vehicle Maker Nikola Goes Bankrupt

A member of the media stands behind a hydrogen-powered Artic truck at the booth of US truckmaker Nikola at the IAA Transportation fair, which will open its doors to the public on September 20, 2022, in Hanover, Germany, September 19, 2022. REUTERS/Fabian Bimmer/File Photo
A member of the media stands behind a hydrogen-powered Artic truck at the booth of US truckmaker Nikola at the IAA Transportation fair, which will open its doors to the public on September 20, 2022, in Hanover, Germany, September 19, 2022. REUTERS/Fabian Bimmer/File Photo

Nikola (NKLA.O) said on Wednesday it had filed for Chapter 11 bankruptcy protection and would pursue a sale of its assets, the latest electric-vehicle maker to stumble after grappling with tepid demand, rapid cash burn and funding challenges.

The development ends a challenging journey, which included several leadership changes, a plummeting share value and short-seller allegations.

EV firms that went public during the pandemic, promising to revolutionize the sector, such as Fisker, Proterra and Lordstown Motors have filed for bankruptcy in recent years as funding for the capital-intensive operations dried up due to high interest rates and flagging demand.

"Like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate," CEO Steve Girsky said in a statement, Reuters reported.

"Unfortunately, our very best efforts have not been enough to overcome these significant challenges," he added.

Elon Musk-led EV pioneer Tesla (TSLA.O), reported its first drop in annual sales in 2024 as high borrowing costs and an aging lineup crimped demand, despite offers and incentives.

Nikola, which started off making battery-powered semi trucks and pivoted to electric trucks that use hydrogen, said it decided to initiate a sale process of its assets to maximize value and ensure an orderly wind down.

The firm will continue some operations for trucks in the field and some hydrogen-fueling operations through the end of March.

Nikola listed assets of between $500 million and $1 billion, and estimated its liabilities were between $1 billion and $10 billion, according to a court filing.

Phoenix, Arizona-based Nikola was founded more than a decade ago. It went public in June 2020 and delivered its first vehicle in the December of the following year.

Nikola ramped up production of its hydrogen-powered trucks in 2024, but still lost hundreds of thousands of dollars on every vehicle sold as fleet operators were reluctant to invest in electric truck adoption amid high borrowing costs.

The stock fell about 45% on Wednesday premarket to around 41 cents.

STRUGGLING FINANCES

In the early days of the pandemic, Nikola struggled to increase its rate of production due to supply chain snags. High costs related to the ramp-up of manufacturing aggravated its woes.

Nikola's cash and cash equivalents dropped sharply to $198.3 million at the end of September, compared with $464.7 million at the end of 2023.

On Wednesday, the company said it was entering Chapter 11 proceedings with $47 million in cash on hand.

Its shares have lost more than 99% of their value since going public in 2020.

The stock has fallen below the $1-mark several times and the company resorted to a reverse stock split last year to comply with Nasdaq's listing rules.

SHORT-SELLER ALLEGATIONS

Shortly after the company went public in 2020 through a merger with a blank-check company, it was hit by a scathing report by short-seller Hindenburg, which disbanded earlier this year. Nikola had denied the allegations.

The report alleged that Nikola had rolled one of its trucks down a hill, portraying it as a functioning truck that could run under its own power, misleading investors.

Founder Trevor Milton was convicted of fraud in 2022 and sentenced to four years in prison the following year.