Global smartphone shipments shrank
Global smartphone shipments shrank in 2018, causing segment leaders Samsung (SSNLF) and Apple (AAPL) to see steep declines in their respective stock prices at the end of 2018. However, both stocks have since recovered.
There was cause for a lot of pessimism in the last quarter of 2018, with several headwinds affecting the sector. One of these headwinds was the lengthening of the replacement cycle as users became more than happy to hold on to their older phones and balked at higher smartphone prices. According to Canalys, global smartphone shipments fell 4.6% last year over 2017.
Shipments should rise next year on the back of 5G adoption
However, at least in Apple’s case, most of the decline in its December quarter could be attributed to the steep decline in its revenue in China. Apple’s revenue from the greater China region fell nearly 27% YoY (year-over-year) in the first quarter of fiscal 2019 (which ended in December 2018).
According to recent estimates by Strategy Analytics, while global shipments and sales from smartphones are likely to continue to decline this year, smartphone shipments are expected to rebound next year.
The research house predicts that global smartphone shipments will rise 2% in 2020 on account of 5G migration, innovations, and an improving economy. Strategy Analytics also expects an uptick in shipments in 2021 on the back of the 5G rollout, and it expects Indonesia to be in the top five countries in terms of smartphone shipments by 2024.