Smartphone new sales to level off in 2013?

[c1ue]

If true, this is a big deal.

http://www.reghardware.com/2012/09/1...s_have_peaked/

The smartphone market will establish its maturity this year: 2012 will be the last time the shipment of handsets to new users grows.

According to figures posted by market watcher NPD DisplaySearch, smartphone shipments have been dominated by upgrade sales - handsets bought by people who already own a smartphone - but until now shipments of devices to buyers new to the category have risen year on year.

No longer. Such shipments will fall in 2013, hold broadly steady for the following two years, and then drop to around only seven per cent of smartphone shipments worldwide.

In 2016, then, some 1100m smartphones will be shipped by manufacturers like Apple and Samsung, but only 76m or so will go to folk who've never owned a smartphone before, DisplaySearch's forecast data show. The rest will be replacement units.
DisplaySearch originally forecast new smartphone sales would result in 220-230m shipments in 2012. Now it believes only 177m new smartphones will be sold. Some 390m upgrade units will take the year's shipments total to 567m, the company reckons. ®

[sunpearl71]

Re: Smartphone new sales to level off in 2013?

This sounds plausible though numbers may vary and can have a big impact.

I think the PC industry's experience is a useful parallel, where major chip upgrades by Intel + corresponding OS + application software by Microsoft ushered in new cycles of growth and revenues.

In mobile space, it's primarily Apple which has set the pace and at some point the growth is bound to hit a plateau.

It will be interesting to see if Apple succumbs to pricing pressures that forced Intel and Microsoft to come up with cheaper, lower performance versions of their standard products like Celeron processors and Office software.

[cjppjc]

Re: Smartphone new sales to level off in 2013?

How close is APPL to having that 1 trillion dollar market cap, that someone here said was impossible?

[lakedaemonian]

Re: Smartphone new sales to level off in 2013?

I'd agree with the "parallel to PC" argument.

To me it seemed like the PC industry got smoked when the processing power seemed to move to far ahead of worthwhile applications to leverage it.....when new applications failed to drive hardware upgrades PC manufacturers suffered...at least that's what it looked/felt like to me.

Phones are getting quite capable hardware wise.....at some stage I would think applications for mobile handset hardware will no longer drive upgrades and the customer purchase cycle will stretch out like an accordion.

[c1ue]

Re: Smartphone new sales to level off in 2013?

How close is APPL to having that 1 trillion dollar market cap, that someone here said was impossible?

AAPL present market cap: $655 billion.

Steve Jobs: dead

EJ: AAPL a bubble.
I: AAPL a bubble.

If in fact smartphone new sales have plateaued, then AAPL market cap growth is done irregardless of anything else occurring.

Any more questions?

Phones are getting quite capable hardware wise.....at some stage I would think applications for mobile handset hardware will no longer drive upgrades and the customer purchase cycle will stretch out like an accordion.

I think we're well past the point already where applications drive upgrades. Among other things, the sheer problems with UI obstruct higher forms of utilization.

[cjppjc]

Re: Smartphone new sales to level off in 2013?

AAPL present market cap: $655 billion.

Steve Jobs: dead

EJ: AAPL a bubble.
I: AAPL a bubble.

If in fact smartphone new sales have plateaued, then AAPL market cap growth is done irregardless of anything else occurring.

Any more questions?

No that about covers it.

BTW: it's irrespective not irregardless.

[Milton Kuo]

Re: Smartphone new sales to level off in 2013?

EJ: AAPL a bubble.

Did EJ ever say Apple stock is in a bubble? The only thing I can think of that might have suggested that opinion was a chart he once put up that compared the Apple stock price against that of gold. I thought the idea behind the chart was to show that Apple wasn't a bubble despite its steepness and gold was even less a bubble because its chart was less steep than Apple's.

[FrankL]

Re: Smartphone new sales to level off in 2013?

Did EJ ever say Apple stock is in a bubble? The only thing I can think of that might have suggested that opinion was a chart he once put up that compared the Apple stock price against that of gold. I thought the idea behind the chart was to show that Apple wasn't a bubble despite its steepness and gold was even less a bubble because its chart was less steep than Apple's.

Is AAPL in a bubble? I guess that depends on what is most likely to happen. I think that the current shareprice of Apple reflects that investors believe Apple to be capable to invent the next product that will take a market overnight like the iPod did for portable music players, the iPhone for smartphones and the iPad for tablets. You can argue that they were the first to successfully mass-market the concept of a digital music player and that of a tablet.

I do think it's possible that Apple can take over the content delivery market if they get into TV next. They'll have fierce competition from Google and Amazon though.

What other possibilities are there for increased profit? They can try and increase prices (as they seem to be doing with the iPhone 5) and/or lower production costs (e.g. use a customized ARM design as CPU for notebooks or sub-notebooks instead of pricier Intel CPUs). Apple can sell all kind of innovative products at reasonably affordable prices just because of their sheer scale. This is a great advantage.

Without Jobs, I'm wondering if they have kept the capacity to successfully develop products for markets that do not yet exist (e.g. the iPad). Another big worry about Apple is that the price of their products is greatly dependent on people having enough disposable income or credit to buy them. Once people need to cut their expenses, Apple product might be a tempting candidate as they usually don't provide you with things you absolutely require to live. Rather, they're the cherry on the pudding (and thus the first to be saved on, as they are not cheap).

[vt]

Re: Smartphone new sales to level off in 2013?

One of the smartest guys I follow (up 40% last year, 23% this) other than EJ, predicted three years ago that Apple at $250 would go to $1,000. He just raised his target to $1,600.

His reasoning:

The S&P 500 trades at 14 times earnings, is growing 5% a year, has a dividend of less than 2%, and debt at 30% of assets.

Apple: 11 PE, 2% dividend, growing at 15% per year which is three times the 500. Oh, they have $120 billion in cash!

http://www.dailymail.co.uk/news/arti...-products.html

Of course if we have a recession next year Apple's price could drop to $500, plus other competitors like Amazon and Google are not standing still. They may still overtake or compete successfully alongside Apple.

[c1ue]

Re: Smartphone new sales to level off in 2013?

Did EJ ever say Apple stock is in a bubble?

It was in a commentary, and it might instead have been Fred, but yes.

Is AAPL in a bubble? I guess that depends on what is most likely to happen.

I posted in another thread showing the iPhone shipments doubling every year up until last year. This is what underlies Apple's P/E of 16.

If the overall smartphone market levels off in terms of net shipments, then the only way for AAPL to continue to grow is to increase profitability on existing sales and/or increase market share.

If this doesn't occur, AAPL as a company will be fine - they'll still make money - but their P/E will fall dramatically. This is what happened to CSCO - the original 'next trillion dollar market cap stock'. Up until 2001, they were growing revenue dramatically. From 2001 until now, their revenue actually doubled, but their market cap has fallen 80% - i.e. P/E has fallen 10x.

One of the smartest guys I follow (up 40% last year, 23% this) other than EJ, predicted three years ago that Apple at $250 would go to $1,000. He just raised his target to $1,600.

His reasoning:

The S&P 500 trades at 14 times earnings, is growing 5% a year, has a dividend of less than 2%, and debt at 30% of assets.

Apple: 11 PE, 2% dividend, growing at 15% per year which is three times the 500. Oh, they have $120 billion in cash!

Meh. Another headline leader.

[cjppjc]

Re: Smartphone new sales to level off in 2013?

AAPL present market cap: $655 billion.

Steve Jobs: dead

EJ: AAPL a bubble.
I: AAPL a bubble.

If in fact smartphone new sales have plateaued, then AAPL market cap growth is done irregardless of anything else occurring.

Any more questions?



I think we're well past the point already where applications drive upgrades. Among other things, the sheer problems with UI obstruct higher forms of utilization.

Well AAPL has certaily backed off that trillion dollar mark. Not to mention another of C1ue's favorites getting hammered, Groupon.

[shiny!]

Re: Smartphone new sales to level off in 2013?

Well AAPL has certaily backed off that trillion dollar mark. Not to mention another of C1ue's favorites getting hammered, Groupon.

Where is C1ue, anyway? He hasn't been posting for awhile.