Displaying items by tag: Decline
Global smartphone sales saw their worst contraction ever in 2018, and the outlook for 2019 isn't much better, new surveys show. Worldwide handset volumes declined 4.1% in 2018 to a total of 1.4 billion units shipped for the full year, according to research firm IDC, which sees a potential for further declines this year.
“Globally the smartphone market is a mess right now,” said IDC analyst Ryan Reith. “Outside of a handful of high-growth markets like India, Indonesia, (South) Korea and Vietnam, we did not see a lot of positive activity in 2018.”
Reith said the market has been hit by consumers waiting longer to replace their phones, frustration around the high cost of premium devices, and political and economic uncertainty. The Chinese market, which accounts for roughly 30 percent of smartphone sales, was especially hard hit with a 10% drop, according to IDC's survey.
IDC said the top five smartphone makers have become stronger and now account for 69% of worldwide sales, up from 63% a year ago. Samsung remained the number one handset maker with a 20.8% share despite an eight percent sales slump for the year. Apple managed to recapture the number two position with a 14.9% market share, moving ahead of Huawei at 14.7%, the survey found.
IDC said fourth-quarter smartphone sales fell 4.9% - the fifth consecutive quarter of decline. “The challenging holiday quarter closes out the worst year ever for smartphone shipments,” IDC said in its report.
A separate report by Counterpoint Research showed similar findings, estimating a seven percent drop in the fourth quarter and four percent drop for the full year. “The collective smartphone shipment growth of emerging markets such as India, Indonesia, Vietnam, Russia and others was not enough to offset the decline in China,” said Counterpoint associate director Tarun Pathak.
US technology giant Apple has announced that it will impose a recruitment cutback - which has been primarily forced due to weak sales on the company’s iPhone devices in the lucrative Chinese market.
Bloomberg has reported that Apple CEO, Tim Cook, announced the recruitment cutbacks just a day after he sent a letter to Apple investors that warned the company was bracing itself for a year-on-year decline in revenue for its fiscal Q1, which would shave $5bn from its guidance.
In a series of meetings that were held following the disclosure, it was reported that Cook informed some staff that a number of divisions would reduce hiring, but stated that he didn’t think a complete freeze in recruitment would be an appropriate solution to take.
In addition to this, it has been further disclosed that the CEO is also yet to determine which divisions will face hiring cutbacks. However, it is believed that divisions such as Apple’s AI team will not be affected due to the leverage of investment made by the US tech company into the emerging technology.
The move will also not affect plans to open a state-of-the-art new office in Austin, Texas or its expansion plans in Los Angeles, where the company is fleshing out its original video content ambitions.
Bloomberg also pointed out that Apple has hired new staff at a significant rate over the past decade. The company recruited 9,000 workers in its most recent fiscal year, taking the total up to 132,000, while adding 7,000 a year earlier.
US technology behemoth Apple has signed a new agreement with Samsung in relation to its streaming and content services in an effort to offset a decline in iPhone sales. The deal brokered between Apple and the South Korean conglomerate will enable the use of iTunes streaming services on Samsung smart TVs.
Chinese telecommunications behemoth ZTE has seen its share price plummet by a whopping 39% following the resumption of its trading on the Hong Kong stock exchange. The Chinese vendor was able to resume trading after it reached a resolution agreement with the United States.
ZTE looked set to go out of business following the decision by the US Commerce Department to prohibit American companies from selling crucial hardware and software components to it for a period of seven years.
US officials implemented the ban after it claimed ZTE had failed to make the changes to its Board of Directors after being found guilty of trade violations with Iran and North Korea in 2016. However, following protracted negotiations between Beijing and Washington a settlement deal was finally reached which allowed ZTE to resume business in the United States.
The telecommunications colossus may have been saved but that didn’t stop its share price from nosediving by 39.22 to HK$15.56 during Hong Kong morning trade - while it also plunged by its 10 percent daily limit to 28.18 yuan in Shenzhen.
Fiscal analysts have predicted that whilst the nightmare for ZTE may be over with the US, the company will have to deal with the consequences of that saga for a significant period of time.
Analysts Edison Lee and Timothy Chau said, “While the nightmare is now over, ZTE will likely have to deal with many changes. We expect significant near-term selling pressure and a volatile stock price."
The ZTE crisis was a major issue during trade talks between the US and China, and the Trump administration were able to use that as leverage in the discussions. The ZTE settlement came just days after Beijing offered to increase purchases of US goods by $70bn in an effort to cut the yawning trade imbalance with the US.
It has been reported that Trump has demanded a $200 billion reduction in its trade deficit with China over two years.
“The US agreement with ZTE with fine and change of management, in other words, is a political deal," said analyst Dickie Wong at Kingston Securities. "If the US didn't 'free' ZTE in this way, US companies would find it very difficult in any moves in China, including decisions on mergers and acquisitions," Wong added.
The CEO of Australia’s leading telecommunications firm Telstra has warned operators that consumer data prices will soon be a thing of the past. Andrew Penn issued the stark statement when delivering his keynote address at Mobile World Congress Shanghai. (MWCS 2017)
According to Penn operators need to prepare for already declining consumer data prices to reach zero within the next 5-10 years. Telstra’s CEO insisted that it was critical that operators diversified away from being just ‘connectivity providers’ - and that they must focus on providing other services for consumers on top of connectivity.
Penn said: “There is a real possibility that the price for data to the consumer will go to zero in the next 5-10 years. Operators must ensure that they can offer customers wider, consumer-friendly services in order to ensure relevance, sustainability and new revenue streams which will help them avoid falling further down the value chain.”
In addition to this, Penn warned of the dangers of spending too much time focusing on ‘cool technology’ being displayed at MWC Shanghai – and not enough on how innovations would be delivered for the good of the customer. Penn added: “We need to ensure that new products that are designed are intuitive and customer friendly.” Telstra’s CEO highlighted Netflix as a successful example of this.
Telstra have introduced a series of new initiatives specifically designed to improve the user interface of new services after conducting an investigation of its customer service calls. Penn revealed that a staggering 90% of queries which were made to Telstra’s customer help center could’ve been avoided if improvements in technology or customer care had been implemented with new technologies.
Telstra have come under scathing criticism in recent weeks in Australia, following the organization’s decision to axe over 1,500 members of its workforce, citing increased competition as the main factor in its decision to reduce staff.
A number of major US technology companies suffered a drastic decline in its stocks following the presidential election of Donald Trump – and are now quite fearful for the future under his administration. During the election campaign close to 150 tech leaders including founders of worldwide brands such as Apple, Reddit and Wikipedia penned an open letter in July - in which it warned that his nomination would be a ‘disaster for innovation.’
However, the controversial Republican candidate and New York based billionaire secured the nomination on November 8th and will now subsequently become the 45th President of the United States. His success has left the technology sector pondering its future under Trump – and already stocks have taken a huge decline since his nomination.
Trumps pre-election rhetoric sent shivers through Silicon Valley as he announced that he intended to squeeze trade on China, clamp down on immigration which is critical to many tech firms - and he also issued a warning to online giants Amazon suggesting they could have ‘a huge antitrust problem’ if he were to be successful in his candidacy.
Gene Munster, an analyst on the technology sector at US investment bank and asset management company Piper Jaffray has moved to dispel some of the fears surrounding immigration and Amazon.
Munster said: “The tech sector is in more control of its own destiny than Donald Trump and will work through these problems.”
“I think the ‘antitrust’ probe of Amazon is unlikely, and I don’t think there will be major change on skilled immigration under Trump, and there could be an increase on tariffs for electronics components and that could potentially impact companies such as Apple, but it would be equally spread over manufacturers because they all rely on imports.”
However, many tech companies could boost significantly from Trump’s pledge to lower taxes on capital repatriated from overseas, which could well benefit companies such as Apple and Google. The tech sector holds the lion’s share of an estimated $2.5 trillion (Dh9.18 trillion) held by US firms overseas.
Bob O’Donnell, a consultant at Tech-analysis Research in Silicon Valley believes there could be a lot of money repatriated by tech companies. O’Donnell said: “Tech firms could use the repatriated money for job creation, and that would be very interesting - the tech sector may get a fresh look at the kinds of services and technologies that people want to invest in under Trump.”
“For example, a major push on infrastructure investment could be a big opportunity to integrate ‘smart’ technology for services such as transportation.”
While Trump has said very little in relation to the tech sector thus far, analysts and consultants have noted that the tech industry is such a huge part of the economy that you simply can’t ignore it. However, it has also been noted and taken into account that things that were viewed as special privileges may be taken away.
Some within the tech sector are gravely concerned that a Republican administration may seek to roll back so-called ‘net neutrality’ which ultimately prohibits broadband firms from playing favorites – which could spell trouble for online video operators like Netflix and Amazon.
Many tech leaders have simply had to put the disappointment of Trump’s election result behind them and move forward. According to the Wall Street Journal, Apple CEO, Tim Cook sent a memo to staff in which he said that the only way to move forward is to do so together. Facebook founder Mark Zuckerberg brushed off the election result by stating that it would not be right to say the election of Donald Trump changes the fundamental arc of technology over time.