Bullish Dollar China Slowdown to Hit Global Smartphone Sales in 2015

first_imgAfter witnessing a fast growth in the past two years, the global smartphone industry is expected to slowdown sharply this year, as the strengthening dollar makes smartphones expensive in key markets.Citigroup now sees the global smartphone industry to grow by only 15.5 percent this year compared to 19 percent last year, Barron’s Asia reported.The US brokerage attributes the slowdown in the smartphone industry partly due to saturation in China, the world’s largest smartphone market. Citi revised down its forecast smartphone shipments to China to just 12 percent in 2015, against the previous estimate of 21 percent.Analysts estimate China to contribute to one-third of total Apple’s iPhone 6 sales over the next few quarters.Shipments of smartphones globally are expected to hit 1.401 billion in 2015, according to Digitimes Research. Growth in smartphone shipments is mainly because of high growth in demand in emerging markets including India, Southeast Asia and Latin America, it added.However, stronger dollar is a big challenge for the smartphone industry this year. As local currencies in major countries depreciate against the dollar, smartphones become costlier for buyers.Sold in local currencies, smartphones will be more expensive in large emerging markets such as Brazil, Russia and Mexico. That stronger dollar dampens demand for electronics is becoming a repeated theme, Citi said.Besides, a stronger dollar is also expected to affect sales of smartphone chip makers as the demand softens for mobile devices.”Based upon the strengthening of the U.S. dollar against many other currencies, which creates weakening purchasing power, there is chance we will have to adjust down that 12 percent growth rate,” Elizabeth Sun, Taiwan Semiconductor Manufacturing Co (TSMC’s) head of investor relations, told Bloomberg News on Friday.Further, the appreciating dollar is expected to put pressure even on global PC shipments this year, and many analysts have already revised down their forecasts for the industry.”We note that the Russian rouble, Brazilian real and euro have all depreciated against the US dollar since Q414. This implies some further downside risk to PC OEMs having exposure to regions such as Brazil and Europe,” said UBS in a note.last_img

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