Is the Smartphone Market Done Growing?
Apple (NASDAQ:AAPL) supplier Imagination Technologies has released financial results and drastically lowered guidance for the coming year as the company predicts that the smartphone market is reaching the point of complete saturation and so smartphone purchases will begin slowing down.
Imagination Technologies makes smartphone graphics and video chips for use in Apple’s iPhones and other smartphones. The company missed analyst consensus and lowered guidance for the coming year, according to a report from Reuters. The company’s shares fell 15 percent on the London Stock Exchange after reporting the results, reaching a three-year low in trading on Wednesday.
“It’s primarily a softness in the market in general, but specifically in the rate of progress in mobile markets,” CEO Hossein Yassaie said of the revenue miss in an interview on Wednesday. The company said it expects the smartphone makers it partners with, including Apple, to ship between 580 and 630 million units next year, down from previous forecasts of 650 million. Forbes said that the results could signal the beginning of the end for the huge growth that’s been seen in the smartphone industry in recent years, as more people in developed nations who want a smartphone have one and the only growth the market sees comes from replacement, not upgrades from feature phones.