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Smartphones
 
Canaccord Genuity – 2018 Mobile Sales Will be Flat
April 16, 2018

​Apple and Samsung Electronics may have to wait until 2019 to see smartphone sales pick up, as this year's sales are expected to be flat thanks to the lack of any "wow"-factors in the current crop of smartphones, according to Canaccord Genuity. Sales of mobile devices will be flat to 2017, with growth resuming in 2019, according to the report. That is when the industry is hoping that advanced technologies like facial recognition, foldable OLED screens and 5G cellular connectivity will emerge, giving consumers a reason to upgrade their old phones. As it stands, smartphone sales growth was just 2.7% in 2017. For 2018, Gartner, the market research firm, is predicting smartphone sales growth of close to 5%, but Barron’s thinks that will be a stretch pointing to Canaccord Genuity forecast and the failure of the latest iPhone X technology to take off en masse. For the December quarter, Apple missed Wall Street sales estimates, while Barron’s said the Samsung Galaxy S9 appeared to be off to a slow start in terms of March sales. For the fourth quarter of 2017, smartphone sales logged their first decline in over a decade, due to a slowdown in upgrades to more feature-rich phones and the longer lifespan of existing mobile devices. According to Gartner, global smartphone sales came in at close to 408 million in the fourth quarter of 2017, marking a 5.6% decline compared to the year-earlier period. (See more: Smartphones Sales Log Ever First YOY Decline in Q4.)

The problem for smartphone makers, noted Barron's, is that experts say there is a lack of a "wow"-factor that entices people to upgrade their smartphones. Barron's pointed out that the BlackBerry controlled email while the iPhone brought computing to small devices — and along the way took out standalone digital cameras. Since then, however, there are few new areas for the likes of an iPhone or a Samsung Galaxy to take over. For the chipmakers that supply the mobile phone market, this could be bad news. With sales slumping, smartphone investors may turn to other suppliers that make things outside of the semiconductors that power the mobile devices.  As for what smartphone makers are hanging their hats on for 2019 -- 5G, facial recognition, and truly curved OLED screens, Barron’s isn't convinced it will materialize soon enough to boost sales next year. Truly curved screens are seen as one of the big drivers of a replacement cycle but it’s not clear if the handset makers will be able to get them into devices in a cost-effective manner by next year. If not, expect another year or so of “incremental” improvements, noted Barron's.