EXCLUSIVE: Skyworth Digital Signals Profit Warning Amid Smart Device Market Turmoil
Shenzhen-based tech conglomerate Skyworth Digital has issued a stark profit alert for the first half of 2025, projecting a precipitous year-on-year net profit decline between 65% and 76% as pricing wars in China’s smart hardware sector escalate. The disclosure, filed Thursday with the Shenzhen Stock Exchange, sent ripples through Asian tech markets ahead of Friday’s trading session.
The company estimates net profit attributable to shareholders will range between 43 million yuan ($5.9 million) and 63 million yuan ($8.6 million) for the reporting period, a dramatic plunge from 182 million yuan recorded in H1 2024. More tellingly, core operational performance—measured by net profit excluding one-time items—is forecast to contract similarly to between 37 million yuan and 55 million yuan.
“This earnings compression stems from a perfect storm of market saturation and hyper-competition,” Skyworth stated, underscoring that average selling prices for its flagship products have dropped 18-22% year-over-year. The margin erosion comes despite maintaining market share in key product lines, including ultra-high-definition 8K set-top boxes, 5G CPE routers, and its emerging XR/VR enterprise solutions portfolio.
Industry analysts point to broader headwinds: GlobalData estimates China’s smart home device market growth slowed to 4.7% in Q2 2025, compared to 12.3% during the same period last year. “Consumer electronics manufacturers are trapped between component inflation and downward pricing pressure from e-commerce platforms,” noted tech analyst Miranda Zhou of Platitude Capital. “Skyworth’s diversified playbook—spanning streaming hardware, broadband infrastructure, and metaverse-adjacent VR gear—isn’t immunizing it fast enough.”
All eyes now turn to Skyworth’s innovation pipeline. While its AI-powered glasses drew attention at CES 2025, commercial deployment remains limited. The firm’s R&D expenditures—up 9% year-to-date—suggest intensified bets on industrial metaverse applications and AIoT-enabled home ecosystems. Whether these investments can offset commoditization in its legacy hardware business may dictate its trajectory through 2026.
As streaming wars evolve into platform-agnostic content battles, Skyworth’s predicament mirrors challenges faced by Roku and Amazon Fire TV. The coming quarters will test if China’s third-largest set-top box maker can transcend its hardware roots to become an immersive tech architect—or remain collateral damage in the global race to the bottom on connected device pricing.
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