In this episode of Device Squad, the podcast for the Mobile Enterprise from Propelics, Steve hosts a Strategists Forum with Propelics Sr. Mobile Strategist Glenn Gruber, and Anexinet Cloud Solutions Director, Ned Bellavance and asks the following questions: What is going on with cellphone sales? Are they flagging? Are they not? And if not, why is there so much discussion around this in the news? Lastly, how long before our phones are replaced by a new and better technology?
Articles cited in the episode:
CNN Money – April 20
Apple sinks on fears of slowing iPhone sales
Morgan Stanley’s Katy Huberty slashed her iPhone shipment projections for the quarter ending in June on Friday, citing weakness in China. Canaccord Genuity’s Michael Walkley also cut his iPhone sales forecasts and cut his earnings estimates for Apple too.
The chief financial officer of a key Apple chip supplier — Taiwan Semiconductor (TSM) — warned of “mobile softness” and “continued weak demand” when it reported earnings this week.
It’s possible that Apple’s iPhone X, which does not have a home button, uses facial recognition and lacks a jack for headphones, may be a little too different for people used to iPhone upgrades being more evolutionary than revolutionary.
Most analysts cite weak iPhone X demand as the biggest problem for Apple.
C/NET — Feb 7
China’s phone sales fell 4.9 percent in 2017
The decline, according to a market research report, is due to manufacturers offering “minor upgrades” that weren’t enticing enough for users to upgrade.
China’s smartphone market slid 15.7 percent year-over-year last quarter, according to a new report published by IDC yesterday. Throughout last year, it fell 4.9 percent.
CNN Tech – April 27
Chinese smartphone sales suffer biggest decline ever
Smartphone shipments in China have suffered their biggest decline ever, plummeting more than 21% in the first quarter of 2018 compared with the same period last year, according to a new report from research firm Canalys.
Chinese consumers bought just 91 million phones in the first three months of this year. The last time the number was that low was in the fourth quarter of 2013.
Samsung, the world’s largest smartphone maker, also warned that overall “sluggish demand” for smartphones would drag down future earnings.
That slowdown has already hit Samsung (SSNLF) sales in China, the world’s largest smartphone market. The company sold just 2 million devices in China in the first quarter of 2018, down more than 50% compared to the same period last year.
Apple (AAPL) also lost ground in China, slipping from fourth to fifth place in the market. The company suffered a “significant decline” in shipments from the previous quarter.
“Apple has a strong image, but their product and innovation is restricted to the very high-priced iPhone X … most Chinese cannot afford that price so they switch to Huawei or Oppo,” said Jia.
Huawei was one of only two companies to buck the declining trend. The Chinese smartphone maker saw sales climb 2%. It remains the top smartphone seller in China, followed by local rivals Oppo, Vivo and Xiaomi.
Xiaomi was the only company to post double digit growth, with sales up 37%, partly reflecting a lackluster performance in 2017.
We forecast … the Chinese market in 2018 will have an overall decline. That would mean back-to-back years of contraction. Annual smartphone sales dipped for the first time ever last year, falling 4% to 459 million phones.
Fidelity News – April 30
Investors look to Apple’s cash, services as iPhone sales seen stalling
The iPhone is by far the biggest product from Apple, accounting for more than 60 percent of its revenue last year, but CEO Tim Cook and other executives have targeted services as a path to growth.
Disappointing forecasts from the iPhone supply chain have lowered expectations for unit sales.
Analysts expecting as few as 51 million handsets sold versus Wall Street’s expectations of 54 million phones and 50.7 million last year. Overall, Wall Street has lowered its expectations for iPhone revenue from $39.7 billion on April 17 to $39.2 billion, according to an average of estimates from 17 analysts by Thomson Reuters.
CNN Tech – April 30
Apple faces Wall Street ‘panic’ over iPhone
Apple stock fell this month after one of its key chip suppliers warned of “continued weak demand.” Since then, a series of analysts have slashed their estimates for iPhone shipments.
Daniel Ives, an analyst with GBH Insights, wrote that Wall Street was in “full panic mode” over iPhone sales ahead of Apple’s earnings report.
Some analysts blame the $999 iPhone X. once viewed by investors as key to driving customers to upgrade their smartphones. Instead, analysts fear Apple missed the mark by launching one redesigned model that is too expensive and two other new devices, the iPhone 8 and 8 Plus, look the same as older models.
Mark Moskowitz, an analyst with Barclays, wrote in an investor note Monday that the iPhone X’s “price point was too high and likely alienated many users.”
Seeking Alpha – May 1st
Apple Reports Second Quarter Results
Apple beats on EPS and Revenue. Sales in China up 20%
Revenue Grows 16 Percent and EPS Grows 30 Percent to New March Quarter Records
“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Tim Cook, Apple’s CEO. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”
CNN Tech – June 8
Apple warns suppliers that iPhone demand is falling
The company told suppliers to to manufacture 20% fewer components for its upcoming iPhones. That could signal it expects waning enthusiasm for its flagship smartphone.
A year ago, Apple told suppliers to prepare for shipments of 100 million iPhone 8, iPhone 8 Plus and iPhone X devices. This year, Apple is taking a “cautious approach,” telling suppliers to prepare for 80 million iPhones, Nikkei reported. Apple is preparing to introduce three new iPhones in the fall.
Investors have been worried that iPhone sales are flattening. Apple shipped 52.2 million iPhones during the first three months of 2018, an increase of just 3% compared to the same period a year earlier. It was expected to sell 53 million iPhones.
Wall Street Journal – July 5th
Samsung Estimates Operating-Profit Growth at 5%, Short of Expectations
Samsung Electronics estimates its second-quarter operating profit was up 5% from a year earlier, missing analyst estimates and ending its streak of record quarters at four.
The world’s largest smartphone and semiconductor maker said Friday that it expects an operating profit of 14.8 trillion South Korean won ($13.2 billion) for the quarter that ended June 30. That would be up 5% from the year-earlier 14.07 trillion won, but down from the previous quarter’s record 15.64 trillion won.
Sales of the company’s latest flagship device, the Galaxy S9, have been weak, as consumers keep their phones longer and remain unimpressed with the newest options.
Lee Seung-woo, a Seoul-based analyst at Eugene Investment and Securities, expects Samsung will ship about 31 million Galaxy S9 devices in 2018. That would mark a dramatic decline from just two years ago, when the Galaxy S7 became Samsung’s best-selling phone ever, with roughly 50 million shipments.
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