J.P. Morgan: Handsets inching ahead 1.5% per year to 2020

Plus: Further consolidation ahead by Apple, Samsung and China’s top 4.

Three bullet points from a note to clients by Samik Chatterjee that landed in my inbox Tuesday:

• Forecasts global handset sales to grow at a +1.5% CAGR between 2017 and 2020. We expect global handset shipments to increase by +1.5%/+2.2%/+0.8% in 2018/2019/2020. Our assumption is based on decelerating growth in global subscribers (+2.6%/+2.3%/+1.8% in 18/19/20) and replacement rate (24.3%/24.2%/24.0%)… We expect smartphone shipments to be back-end loaded this year, with flat Y/Y trend in 1H and a +4% growth in 2H.
• Ongoing market share consolidation by top OEMs including Apple, Samsung, and China Top-4. Apple, Samsung, and the China Top-4 together represented 69% of total smartphones in 2017, up from 64% in 2016. We expect these leading brands together to claim higher shares in 2018.
• Regional growth details: Expect China replacement demand improvement starting 2Q18 and North America rebounding to growth in 2019. We expect emerging market growth to outperform developed market growth for the next three years.

My take: This is the maiden voyage for J.P. Morgan’s Global Handset Model. I’ll keep an eye on it.

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