Analyst says global smartphone production will hit lowest level in six years

midian182

TechSpot Editor
Staff member

As reported by Business Insider, Credit Suisse wrote in a note to clients that global smartphone production is in free-fall, with the “bottom not yet in sight.” For the final three months of 2018, it has revised production forecasts to 357 million units—a quarterly decline of 3 percent. It predicts output will fall to 289 million units in Q1 2019, a 19 percent QoQ drop.

Should Credit Suisse’s prediction come to pass, this quarter will see the lowest smartphone production levels since 2013. It will also mean that first-quarter 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," the agency said.

We’ve already seen smartphone giants issue warnings over falling profits and sales. As we entered 2019, Tim Cook announced that “[Apple] revenue will be lower than our original guidance for the quarter."

Last week, market leader Samsung said the final quarter of 2018 had seen it miss analysts’ expectations and brought its first quarterly profit decline in two years.

The smartphone market has been stagnant for a while, but things appear to be getting worse. Fewer people are buying the latest flagships, which have been offering only incremental improvements over their predecessors, while owners of feature phone aren’t upgrading to full smartphones due to the lack of “ultra-low-cost” options.

Companies have promised that this year will bring big changes. Several handsets, including the Galaxy S10, are switching to hole punch designs instead of notches, which most Android users hate. We’re also seeing more under-screen fingerprint scanners, multiple camera setups, and even folding phones. But it remains to be seen whether this will give the industry the boost it needs.

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psycros

TS Evangelist
Time to resurrect actual innovation and value, then! Hey OEMS, how about bringing back user-replaceable batteries? You guys could produce oversized batteries with special covers for those who value talk time over being able to slice bread with a phone. How about some cool slider designs like we had a decade ago? Make a portrait slider with two screens like Nintendo DS so you can have your keyboard or virtual game controls without taking up half the main screen. Nintendo is making games for phones now, after all. When the lower screen isn't being typed on it could be showing the weather, calendar, notifications, etc. For those who love physical controls you could make gamepads and keyboards that clip to a screen and can be stuck to the back of the phone when not being used (or add them via a slider design). Stick-on game controllers and clip-on keyboards have been done in the past but I'm sure the designs could be better now.
 
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MaXtor

TS Evangelist
Platinum
I'm still using a 2015 phone. I haven't been intrigued enough by anything recent to warrant an upgrade. Everything seems incremental, nothing especially innovative. I was hoping Microsoft would release a Surface phone with full fledged Windows, but that seems unlikely to happen. I'll probably be fine with my current phone for a while yet.
 
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Uncle Al

TS Evangelist
My own phone is just over 4 years old so I'm interested in seeing those newer, cheaper Samsung phones that are coming out ...... could be worthwhile ....
 

seeprime

TS Guru
We've reached the point where younger people will get their first smartphones and most others will keep what they have for longer than they did in the past. The smartphone manufacturing firms need to adjust their planning to current market conditions, like PC companies have done for the past five years.
 
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mcborge

TS Guru
I don't see the point in buying a brand new smartphone any more. I just upgraded from my old used Galaxy S5 to a used galaxy S7. The S7 cost less then half of what I paid for the S5 four years ago, which tells me that even the used smartphone market is bottoming out too. Why buy a new phone when there are such good deals on used flagship phones, even if they are a year or two old. The S7 cost me £120 if anyone was wondering.
 
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antiproduct

TS Addict
I used to buy a new phone every 2 years, when my contract was up and I could get a nice discount. Now that's gone and phones are expensive as hell. So I'm totally fine with using my 3 year old phone for a couple more years.
 

Avenger001

TS Booster
All we seem to get with some of these phones on the market is a new level of price gouging for sometimes mediocre increase in performance or display quality.