Did you get a smartphone for Hanukkah, Christmas, or Kwanzaa this year? If you did, you’re actually part of a much smaller crowd than you’d think. New reports from IDC say that smartphone shipments were down this year. However, investors don’t seem to care much; three of the biggest stocks in the smartphone space—Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL), and Qualcomm (NASDAQ:QCOM)–are all trading up in Thursday afternoon’s session.
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The word from IDC is a disaster for the smartphone space. Smartphone shipments plunged 18.3% in the holiday quarter and a grand total of 11.3% for all of 2022. This was a disaster for two big reasons. One, it was the first time that a holiday quarter for smartphone shipments ever turned out lower than the previous quarter. Two, 2022’s numbers represented the lowest shipment total seen since 2013.
Macroeconomic factors are causing consumers to rethink purchasing new smartphones, which is prompting manufacturers to cut back on supply. Thus, even if customers wanted to buy in, they’d have a harder time doing so, thanks to declining supply. That makes 2023 not appear as a likely timeframe for a recovery in the smartphone market. IDC again notes that consumers are waiting as much as 40 months before upgrading their handsets. Throw in what amounts to a technology plateau on new smartphone releases, and the slowdown explains itself.
Wall Street, meanwhile, shows us there are clear winners and losers in the smartphone space. Qualcomm stock is the comparative loser right now. Analyst consensus calls it a Moderate Buy. With an average price target of $142.55, Qualcomm stock offers a 6.87% upside potential. Apple and Alphabet, meanwhile, are much farther ahead with Strong Buy ratings. Alphabet, though, offers a 24.53% upside potential thanks to its average price target of $123.
