iPhone X, component shortages lowering phone demand: report

A new report from Gartner Inc. is predicting the Nov. 2017 release of Apple Inc.’s iPhone X combined with component shortages will cause a dip in ability to meet smartphone demand in 2017 and push worldwide mobile phone purchasing into 2018. In the study, analysts saw a decline in 2017 mobile phone year-over-year worldwide shipments from 2016 of about half a per cent, but predicted shipments should return to growth by 2018. Analysts also predicted that, in a six per cent increase from 2017, smartphones will make up 86 per cent of mobile phone shipments in 2018. Even though Apple’s flagship phone’s higher-than-normal price is the topic of much discussion, Gartner analysts still expect that the iPhone X will drive sales in North America, China and Western Europe. "Given the late November availability of the iPhone X, we expect the iPhone's replacement cycle to flow more strongly into 2018," said Roberta Cozza, research director at Gartner, in a press release. "Decrease in total mobile phone demand in 2017 is also expected to come from a weaker lower end of the smartphone market," said Cozza. "For this segment, local vendors continue to struggle against the shift toward top brands, while component price increases affect the ability of some Android vendors to compete more aggressively on price." Although this will influence 2017 numbers, 2018 is expected to see a higher-than-predicted growth of the smartphone market. These fluctuations could have positive impacts on Canadian telecoms’ Q4 2017 results. Barclays Capital analyst Phillip Huang wrote in a note on Monday that the late release of the iPhone X would reduce customer churn and increase wireless margins for the final quarter of the year. “We believe every wireless operator selling the iPhone in Canada had built in greater conservatism into their 2017 budget in anticipation of Apple's 10th anniversary iPhone launch potentially driving above-normal upgrade volumes,” Huang said in the note. But with the release of the iPhone 8 and 8+, upgrades and interest ended up weaker than expected, reducing the number of customers who sought to change their contracts and lowering the amount telecoms spent to subsidize new smartphone purchases, said Huang. He explained with the late iPhone X release and aforementioned component shortage, much of the predicted activity of Q4 2017 could be pushed to 2018. “Combined with the fact that the industry appears to have pulled forward some upgrades into Q2 this year, we believe the industry may see noticeably better wireless churn and margins for both Q3 and Q4,” wrote Huang. The Gartner study was conducted during June and July 2017 among 16,537 online respondents who ranged from 18 through 74 years old, in the U.S., U.K., Germany, China and India. Gartner did not respond to requests for the margin of error.

iPhone X, component shortages lowering phone demand: report

Brief | October 17, 2017

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

iPhone X, component shortages lowering phone demand: report

Brief | October 17, 2017

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

New G7 tax agreement not good enough: tax lobby group

Quebec judge approves Apple class action settlement

Privacy commissioner hasn’t approved new gov’t contact tracing app

CRTC commissioning report about market impact of online BDUs

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us