Mon. Jun 24th, 2019

Demand for new smartphones is in free-fall and this chart shows that the bottom is not yet in sight

Demand for new smartphones is in free-fall and this chart shows that the bottom is not yet in sight

Tim Cook iPhone

  • Analysts at Credit Suisse think smartphone production levels are in free-fall, and the bottom is nowhere near in sight.
  • The investment bank said smartphone production levels will drop to their lowest level since 2013 in the first three months of 2019.
  • People are happier to hang on to their handsets for longer and breakout innovation is becoming harder to come by, with many phones capable of doing similar things.

Apple is far from alone in feeling the pain of falling demand for new smartphones.

After its earnings warning shook Wall Street earlier this month, new figures show that all manufacturers are increasingly struggling to get customers to upgrade or buy new phones.

In a note to clients, Credit Suisse published estimates showing that global smartphone production is in free-fall, and the bank’s analysts warned that the “bottom not yet in sight.”

Credit Suisse revised down its smartphone production forecast for the final three months of 2018, predicting it will fall by 3% quarter-on-quarter to 357 million units. It said first-quarter output will fall 19% to 289 million units.

Read more: Apple is reportedly cutting iPhone production by 10% after one of the darkest weeks in its history

Put another way, Credit Suisse thinks smartphone production levels will drop to their lowest level since 2013 in the first three months of 2019. This graph says it all:

Credit Suisse

If Credit Suisse’s forecasts prove accurate, it means that first-quarter smartphone production will have fallen for five consecutive years. “It is too early to say whether this news is already fully discounted in share prices, or will continue to have an impact,” it added.

Apple, Samsung, and companies like Huawei — the second biggest phone manufacturer in the world — are all feeling the squeeze. People are happier to hang on to their handsets for longer and breakout innovation is becoming harder to come by, with many phones capable of doing similar things.

As James Cordwell, a tech analyst at Atlantic Equities, told Business Insider this month, the smartphone market has “become a bit boring.”

SEE ALSO: Apple’s brutal sales warning sparked a Wall Street debate on whether tech stocks will be dragged into a disastrous downturn

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