Companies like Apple and Samsung have blamed China in recent weeks as the reason for their respective smartphone sales slowdowns. More broadly, meanwhile, factors like steadily rising handset price tags — with premium models starting at $1,000 and above — as well as better all-around quality have led consumers to wait longer than ever to upgrade and increasingly hold on to their current models as good enough for now.
All of which are among the reasons a new industry estimate predicts that global smartphone production will plummet another 19% this quarter, marking the fifth straight first-quarter decline.
More worryingly, the plunge would mark the industry’s lowest production point since 2013. And according to the new analysis from Credit Suisse, this may not even be the bottom.
The bank recently published a note to clients lamenting that smartphone production around the world is “in free-fall,” according to the investor note seen by Business Insider. “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.”
The production totals, remember, are distinct from sales figures. But you can’t sell what hasn’t been produced, and the production numbers are indeed troubling for the industry. The estimated 289 million total produced for the first quarter is down from 334 million during the same period in 2018.
The Credit Suisse note goes on to speculate that it’s too soon to say whether the share price of companies like Apple have fully absorbed the news of this expected decline or if it will continue to weigh on companies going forward.
It will certainly be an interesting year, for sure, for the world’s top handset makers. Samsung remains the world’s top smartphone company, though it’s being squeezed by cheaper Android competitors on the low end while the company also fights with Apple in the premium category. Huawei, the number three smartphone company, sells well-regarded handsets outside of countries like the US and has aggressively promised to give Samsung — which is releasing high-profile new handsets this year like a foldable model as well as the Galaxy S10 — a run for its money in competition for the Number 1 spot. And then there’s Apple, customers of which continue to devote strong loyalty to iPhone as a brand and about which the rumor mill is starting to feed us new tidbits about Apple’s 2019 iPhone lineup that’s expected to consist of three devices, which you can read more about here.