Mor­gan Stan­ley cuts ’15 smart­phone out­look on weak de­mand

The China Post - - BUSI­NESS -

Mor­gan Stan­ley said that re­duced de­mand from de­vel­oped and emerg­ing mar­kets has trig­gered a cut in its global smart­phone growth es­ti­mates for this year and next.

As a re­sult, the U.S. bro­ker­age is cut­ting its fore­casts for 2015 smart­phone ship­ments by 3.1 per­cent to 1.46 bil­lion units and for 2016 by 6.3 per­cent to 1.61 bil­lion units, it said in a re­search note dated Aug. 13.

The new es­ti­mates for smart­phone ship­ments sug­gest a 10.4 per­cent year-on-year growth in 2016, com­pared with an in­crease of 28-76 per­cent over the past five years.

Mor­gan Stan­ley has also low­ered China’s 2016 smart­phone ship­ment pro­jec­tions by 1.4 per­cent to 433 mil­lion units, or up 2 per­cent year-on-year, fol­low­ing a pre­vi­ous es­ti­mated growth of only 1 per­cent for 2015.

“We ex­pect the com­bi­na­tion of high pen­e­tra­tion in de­vel­oped mar­kets and China after the big re­fresh cy­cle, cur­rency fluc­tu­a­tions that weak­ened pur­chas­ing power in emerg­ing mar­kets, and limited dif­fer­en­ti­a­tion among An­droid looka­likes to shorten re­place­ment de­mand,” said Jas­mine Lu (

), a Taipei-based an­a­lyst with Mor­gan Stan­ley.

She said stag­nant vol­ume growth and in­ten­si­fy­ing com­pe­ti­tion have boded ill for the smart­phone pric­ing trend, as the global smart­phone av­er­age sell­ing price was US$289 in the sec­ond quar­ter of 2015, rel­a­tively flat from the same pe­riod of a year ago.

Ex­clud­ing Ap­ple Inc.'s iPhones, the av­er­age sell­ing price for An­droid-based smart­phones was down 15 per­cent year- on- year in the April-June quar­ter, which could de­cline fur­ther in 2016 due to slower-than-ex­pected up­grades in hard­ware spec­i­fi­ca­tions, Lu said.

As a re­sult, Lu sug­gested that in­vestors should avoid An­droid­based hand­set OEMs, in­clud­ing TCL Com­mu­ni­ca­tion, Len­ovo Group Ltd. and Tai­wan's HTC Corp. ( ), and com­po­nent sup­pli­ers who are likely to suf­fer from greater mar­gin pres­sure, such as Sunny Op­ti­cal and Sun­lord.

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