As iPhone X demand declines, J.P. Morgan lowers forecasts

A new report from CNBC outlines some new information from J.P. Morgan about expected iPhone sales in 2018. An analyst from the firm, Bill Peterson, explains that its research partners in Asia have reduced their estimates for iPhones being built in Q1 and Q2.

Taking in account our new expectations for smartphone demand, we take down our March quarter, June quarter and full year estimates for wireless companies under coverage.

As a result, the Asian supply chain analysts lowered their iPhone X production forecasts to 55 million from 60 million for Q1, and 45 million from 50 million in Q2. Suppliers who provide components for these smartphones highly rely on Apple’s sales to make ends meet.

In regards to these suppliers, Peterson writes: “non-mobile business fundamentals remain strong, but not enough to overcome weakening Apple demand.”

Smartphones are getting more expensive every year, with 2017 bringing the most expensive ones like the Note8 and the iPhone X. However, phones's improvements between generations of devices are not as apparent as the previous one. Pretty much everyone has a smartphone in their pockets these days, and even phones that are two years old at this point are still working just fine.

This combination of planned obsolescence, the declining need for smartphones, along with increasing prices of premium smartphones - will lead us to an inevitable plateauing or slow-down of smartphone demand.

In our opinion, LG made a smart move by deciding not to release a brand new smartphone every year, but rather release some updated version of its 2017 smartphones in 2018.

What do you think will happen to the smartphone industry in the next five years? Will we see more phone makers focus on one phone for a longer time?

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