In the past three years, high-end smartphone has been one of the biggest growth drivers for the semiconductor industry given robust unit growth and substantial semi content increase. However, a perceived lack of innovation (e.g. iPhone 5, Galaxy S4) and delays in purchases have resulted in a sharp slowdown of high-end smartphone demand in 2013. Both iPhone 5 and GS4 turned out to be major disappointments. Given Apple and Samsung together account for more than 3/4th of the total high-end smartphone market, it’s a clear sign that high-end demand is slowing down.
The biggest culprit is apparently Apple, as we expect Apple’s high-end smartphone shipments to decline Y/Y in 2013 (we defined Apple’s high-end model as all the iPhones except for iPhone 4, but we do regard iPhone 4S and low-cost iPhone as high-end given their high retail price).
Samsung’s high-end growth is also much lower than market expectation. Among the 2nd-tier brands, HTC, Nokia and Blackberry continue to do very poorly despite the Apple / Samsung weakness. LG and Sony did relatively ok, but they are too small to move the needle.
The top 4 Chinese brands (ZTE, Huawei, Lenovo and Coolpad) continue to do very poorly in the high end segment. None of them has really gained any ground in the high-end despite the launch of multiple quad-core smartphone models.
Three factors which leading Mobile Manufacturers are working on can give a boost to the sagging sales once they incorporate these changes into their flagship models.