Smartphone, television, and fast-moving consumer goods (FMCG) companies have begun trimming their product portfolios as rising input costs driven by the ongoing war are forcing them to focus on high-demand, high-margin offerings. Costs of key components such as memory chips and crude-linked packaging materials have surged amid global supply headwinds sparked by the war and a rapid build-out of artificial intelligence infrastructure.
According to Counterpoint Research, smartphone makers are rationalising their portfolios by 5 to 7 per cent, prioritising profitability and improving channel efficiency. Television manufacturers are also scaling back model line-ups after price increases of up to 20 per cent over the past four months rendered several variants unviable at their intended price points.
Companies are concentrating on fewer, better-selling models to sustain margins without compromising competitiveness. In the FMCG and grocery segments, firms have rationalised stock keeping units (SKUs) by up to 20 per cent as packaging material costs have soared against the backdrop of the war. Further, pruning low-rotation SKUs is helping optimise supply chains and improve production efficiency.
Additionally, Counterpoint Research data showed smartphone makers launched 10 entry-level 4G handsets in the March quarter, a modest increase from seven a year earlier.
