Credit Suisse: Bottom out of sight for sinking smartphone production
Apple is far from lowering the demand for new smartphones. After the earnings warning shook Wall Street earlier this month, new data shows that all manufacturers are increasingly struggling with customers upgrading or buying new phones.
In a statement to customers, Credit Suisse released estimates that global smartphone production is in free fall, and the bank's analysts warned that the "bottom is not yet in sight."
Credit Suisse has downgraded its smartphone production forecast for the last three months of 2018 and predicts that it will decline 3% quarter-on-quarter to 357 million units. Production in the first quarter will fall by 19% to 289 million units.
In other words, Credit Suisse believes that smartphone production will drop to its lowest level since 2013 in the first three months of 2019. This graph says it all:
If Credit Suisse's forecasts are correct, it means that smartphone production will have fallen in the first quarter for five consecutive years. "It's too early to say if this news on stock prices is already fully discounted or will continue to impact," she added.
Apple, Samsung and companies like Huawei – the world's second largest mobile phone manufacturer – are all feeling the pressure. People prefer to stick to their cell phones for longer, and it's getting harder and harder to innovate, with many phones able to do similar tasks.
As James Cordwell, a technical analyst at Atlantic Equities, told Business Insider this month, the smartphone market has "gotten a bit boring".
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