UBS surveyed 8,000 smartphone users around the world, and the results should worry Apple

Matt TurnerMay 29, 2019, 01:46 IST

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UBS surveyed around 8,000 smartphone owners in the US, UK, China, Germany, Japan, and India, and found the overall 12-month forward-purchase intent had fallen to the lowest level since it started conducting the surveys.
"We continue to see extending device lifetimes, weak near-term purchasing intent and with these issues compounded by the disruption Huawei faces, we forecast smart-phone units declining 7% in 2019E," UBS said.
The findings spell bad news for Apple in particular.
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Feeling less than jazzed about the latest smartphone update? You're not the only one.

UBS recently surveyed around 8,000 smartphone users in the US, UK, China, Germany, Japan, and India, and the findings spell bad news for many of the major players in the smartphone market. Specifically:

UBS found the overall 12-month forward-purchase intent, a sign of whether respondents were looking to buy a new phone in the next year, had fallen to the lowest level since it started conducting the surveys.
That, coupled with the disruption surrounding Huawei, led UBS to cut its forecast for smartphone units in 2019 by 7%.

In particular, the charts spell bad news for Apple. To be clear, Apple is still a UBS analyst pick, with a price target of $225, versus the current price of around $180. But it still faces the following problems:

UBS says that on its latest supply-chain analysis, it thinks iPhone procurement volumes in the first half will be down 32% year-on-year.
The percent of people planning to buy an iPhone has fallen in the US. Android has now overtaken Apple as the most retentive brand. Apple probably can't raise prices anytime soon. And it's lost some of its allure as an aspirational brand.
And in China, Apple's status as a trusted brand has taken a hit, its retention rate has dropped, and the percent of people planning to buy an iPhone in China has dropped sharply.

To the charts:

See UBS surveyed 8,000 smartphone users around the world, and the results should worry Apple >>

Fewer people plan to buy a phone in the next 12 months.

Because everyone is holding on to their phones for longer.

The percent of people planning to buy an iPhone has fallen sharply in China and dropped in the US.

Android has now overtaken Apple as the most retentive brand on the smartphone market.

UBS says that over time it believes this will "increasingly pose a headwind to Apple's ability to take share."

Th note added: "This can also be seen if we look at the destination of consumers who are switching OEM - in prior periods Apple would have been a net-gainer in this base but now the outlook is much more balanced which we believe is a consequence of the improved retention that has built up around the Android ecosystem."

UBS says Apple's average selling price (ASP) has likely hit a ceiling, meaning there's not much room to raise prices.

And Apple's been losing some of its allure as a "aspirational" brand with unique products.

Apple's status as a trusted brand in China has also taken a hit.

Apple's retention rate has dropped in China in particular.

Apple is possibly a victim of the on-going trade tensions between the US and China, according to UBS.

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