Smartphone Sales Could Tumble In 2019 As iPhone Falters And Industry Shifts To 5G

Things aren't looking great for the smartphone market overall in 2019. J.P. Morgan is predicting that the biggest impact in the sagging smartphone realm will be felt by high-end device makers like Apple and Samsung. A note from J.P. Morgan to investors predicts that iPhone units will decline year-over-year in 2019 due to extended replacement cycles and lackluster demand in China. Analysts at the firm predict that overall smartphone industry sales will shrink between 4.8% and 5.5% in 2019.


That is significantly larger than the 2.9 to 3.3% loss the industry saw in 2018. Recovery is predicted to come in 2020 when 5G devices will become widely available, and consumers are expected to upgrade heavily to get faster internet speeds. The rate of growth anticipated in 2020 has been reduced from 1.9% to 0.9% showing that even when 5G is available in force, sales will still be soft.

Part of the reason the smartphone segment, and Apple specifically, are seeing declines in shipment is that competition in China, particularly from local brands like Huawei and Xiaomi, is fierce. Many buyers are price sensitive and with the cost of iPhones and Galaxy devices soaring, Chinese consumers are turning to local firms that are selling smartphones for hundreds of dollars less than iPhones. 

Apple is pushing ahead with new iPhone models despite soft sales with rumors suggesting three new iPhone models in 2019. Many hope one of those models will be a strong performing, mid-range priced device like the now-canceled iPhone SE. Apple missed its earnings mark last year and attributed some of the shortfall to soft demand in China and the 11 million batteries it had to replace under its $29 battery offer to make up for throttling devices.