Citi Cuts 2017 Smartphone Forecast By 1%

Citi's Dennis Chan cut 2017 smartphone shipment forecast by 1 percent, claiming demand is "relatively stable." As a result, Citi estimated 7.6 percent global smartphone unit growth in 2016 and 7.0 percent in 2017 compared to previous estimates of 7.7 percent and 7.6 percent respectively.

Much of the cut was due to Central Europe/Middle East/Africa shipments, which reported 9 percent below the firm's previous forecast. Due to the miss, Citi analysts revised down Middle East Africa forecasts.

Despite weaker-than-expected Central European smartphone shipments, down 13 percent from last quarter, Chan increased his forecasts on Eastern Europe as "Russia is seeing a recovery on currency stabilization."

Declining Sale Prices

Notably, Chan expected "global smartphone average sale price to decline at a 5 percent CAGR (2015–2017E)," which is unchanged from prior estimates. Average sale price is expected to drop from $300/unit to $254/unit in 2017 for a market size of $422 billion from $390 billion in 2014.

A Few Names

The analysts highlighted the following names in the space:

• Apple Inc. AAPL: Buy
• TDK Corp (ADR) TTDKY (TTDKF): Sell
• SAMSUNG ELECTRONIC KRW5000 SSNLF: Buy
• SUNNY OPTICAL TECH HKD0.10 SNPTF: Buy
• AAC TECHNOLOGIES H USD0.01 AACAF: Buy
• FOXCONN TECH CO TWD10 FXCOF: Sell