American multinational investment bank and financial services company JP Morgan is predicting that the smartphone industry will come under severe strain this year and that the high-end smartphone segment will be most affected. This segment is dominated by Apple and Samsung and they will take the biggest hit if the market analysis pans out as predicted.
In a note sighted by AppleInsider, JP Morgan wrote; “We expect iPhone unit[s] to decline by double digits y/y [year-over-year] in 2019, due to prolonged replacement cycles and lacklustre demand in China.” Shipments for the last quarter of 2018 from China are estimated to be lower than that of the same period last year by 20%. In addition, the entire mobile phone industry is predicted to get a reduction of between 4.8 and 5.5% in shipments this year. This is a tad higher than the 2.9 to 3.3% loss YoY recorded in 2018. The phone industry isn’t expected to rebound until 2020 when 5G phones would have been in full swing thus prompting people to upgrade for faster internet speeds. Even at that, the industry’s growth rate is now forecast at 0.9% instead of 1.9%.
Read Also: Samsung Galaxy S10 series In-display fingerprint scanner won’t work with a screen protector
Samsung’s own shipment is expected to drop in the low single digits in 2019. The Korean firm has to its advantage, the flexibility to compete in both the high-end as well as in the low- and mid-range phone segments. The company will, however, have to sacrifice profit margins in the process. The rise of Chinese phone makers like OPPO, Vivo and Xiaomi which offer smartphones with improved quality at way lesser prices than iPhones or Samsung models isn’t helping matters.
(source)
