IDC Ups Its 2024 Smartphone Forecast — And That's Good for 3 Portfolio Stocks
Better than previously thought shipment volumes benefit these holdings.
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* IDC sees a stronger than-previously-expected smartphone market.
* Higher volumes bode well for Qualcomm, Universal Display, and Apple shares in the 2024 second half.
* The next data point ahead of Apple’s September event will be August revenue reports from Taiwan Semi and Hon Hai.
Shares of Qualcomm QCOM and Apple AAPL outperformed the market Tuesday, something we can trace to positive comments from research firm IDC about the 2024 smartphone market. IDC now sees the 2024 smartphone market growing 5.8% year over year to 1.23 billion units, up from its previous forecast of 4% growth to 1.21 billion units. As we know, the device market is a big one for both Qualcomm and Apple, but it's also one for Universal Display OLED, which, surprisingly, was down despite IDC’s report.
Taking a more granular look at IDC’s report, it now sees iOS smartphone shipments rising 0.8% this year but continues to say that there could be upside “depending on how well the demonstrated GenAI use cases play out in the upcoming iPhone 16 launch.” Some on Wall Street recognize nearly 300 million iPhones have not been upgraded in the last few years, and that could foster a very strong replacement cycle starting later this year. While IDC didn’t call that out, it does sees iOS smartphone shipments climbing 4% in 2025, but that could be conservative depending on how consumers receive Apple Intelligence.
While the focus is on 2024, IDC also updated its longer-term forecast, which shows steady year-over-year smartphone shipment growth through 2028. That likely reflects the continued adoption of newer, AI-capable smartphones, which IDC sees accounting for ~18% of the market by the end of 2024. How accurate IDC’s forecast proves to be is something we’ll see over time, but directionally it fits with our longer-term thinking.
Back when I was a Wall Street equity analyst who covered the smartphone sector, the seasonal pattern of outperformance for the sector and its food chain ran from August until December-January. The next signpost that will tell us more about the smartphone market’s second-half 2024 potential will be the August revenue reports from Taiwan Semiconductor TSM and Hon Hai HNHAF. Ahead of those reports, we remain bullish on QCOM and OLED shares, and based on what we learn on both of them as well as the Apple Intelligence use cases Apple showcases on September 9, we’ll revisit that price target as needed.
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At the time of publication, TheStreet Pro Portfolio was long AAPL, QCOM and OLED.
