​Huawei’s (pvt) smartphone business has been severely disrupted by the US trade restriction placed on the company that do not allow US companies or foreign companies that use US products to sell to Huawei.  This has limited Huawei’s smartphone business to China and stifled its ability to produce 5G smartphones for its customers.  While Huawei has developed its own flavor of Android, its smartphone customers are also unable to access the Google (GOOG) Play Store, which means they are unable to access many Android applications and updates and without the advanced node 5G chips produced by Samsung and Taiwan Semi (TSM), their phones are limited to 4G..
As a result Huawei’s share of the smartphone market has declined from 19.36% in 2Q 2020 to 1.8% in 1Q this year, with little hope that such sanctions will be lifted in the near-term, and while local semiconductor fabs are able to produce more mature node chips, they are also prohibited from purchasing much of the advanced lithography tools needed for nodes below 28nm.  Huawei went as far as to sell its Honor (pvt) smartphone brand division to investors in order to separate it from the US restrictions although the company has no interest in Honor at this time.  Given the tight rein the US restrictions place on Huawei, the company has transitioned into businesses that are not based on advanced node semiconductors, but has not given up on the smartphone business despite the lack of consumer traction.
It seems that Huawei is able to provide 5G service for its customers if they purchase a mobile phone case that is made by a 3rd party that is not affiliated with Huawei and therefore is able to purchase 5G modem components.  While the case offers some protection for the phone, the real purpose is to give 5G service to Huawei smartphones.  But things go further as a company known as TD Technology (pvt), an affiliate of TD Tech Holdings (pvt) which is jointly owned by Huawei and Nokia (NOK), sells a smartphone known as the TD Tech M40, strangely similar to the Huawei Mate 40 series of 4G smartphones, but capable of 5G service, and we say strangely similar as TD Tech is a licensing partner of Huawei and has acknowledged that it purchases parts from the company.  The Huawei P50 series, released last year has the same lack of 5G service but it seems a company known as Soyea Technology (000909.CH) has developed a “5G Communication Case” that is suitable for the Huawei P50 Pro, and can be purchased for ~$120.
Huawei has recently removed the Mate 40 smartphone line from availability, which many believe is in anticipation of the release of the Mate 50 expected this summer, which is already said to possibly include a ‘mobile phone case’ similar to the one mentioned above, allowing the phone to provide 5G service and stimulating Huawei’s smartphone sales, and while much of the Mate 50 story is speculation, expectations are that there will be a number of ‘cases’ available for the new Huawei smartphones as accessories.  As TD Tech is a real company with over 1,800 employees they can obviously develop their own 5G smartphone line based on Huawei (licensed) technology, as they did with the Huawei clone mentioned above, but as it turns out, much of the TD Tech board is composed of Huawei executives and an undisclosed holding company beneficiary, which creates further suspicions that Huawei is even more closely tied to these ‘clone’ phones. 
We wonder if the US DOD is up on these connections, as a possible workaround for Huawei’s smartphone business and whether TD Tech and Soyea will be added to the US entities list or will be allowed to provide help to Huawei’s smartphone business?  We assume the answer depends on how stringent the DOD wants to be with Huawei and whether it is politically beneficial to tighten the screws on Chinese companies heading into the mid-term elections.  If we know, we have to assume someone at the DOD knows that the Huawei clones are already here…
 

Samsung Electronics (005930.KS) is the volume leader in the smartphone space in most quarters, and as such is constantly being pressured by rivals to innovate their smartphone offerings, especially as smartphone display size reached a size where the device barely fit into a pocket.  Samsung Display (pvt), a Samsung affiliate, took the expertise it had developed in flexible OLED display production and applied it toward developing a commercial display that was flexible enough to fold without breaking.  While Samsung was not the first to develop such technology (others had demoed concept displays and prototypes in previous years), and was outdone by China’s Royole (pvt), who released the first foldable smartphone (developer version) in December 2018, after being announced earlier in the year.  Samsung released its first foldable smartphone in September 2019, the Galaxy Fold, after announcing the device at CES earlier that year.
The initial reviews of the Galaxy Fold were favorable from a technology point of view but not from a practical one, as problems with visible crease lines in the display caused many to set aside the technology in order to give Samsung time to fix the display issues.  As the company had already committed to the foldable concept they delayed the actual release date (April 2019) until they were able to make changes to the display and the fold hinge to reduce the crease.  While this gave hesitancy to consumers that might have been early adopters, especially the lengthy ‘care’ instructions given to consumers upon the final release, Samsung Display and its parent continued to push forward with the concept.
Since then Samsung has released at least two foldable smartphones each year and is expected to announce the 2022 versions in August, with delivery in September, and while there have been numerous ‘leaks’ and unsourced mock-ups about these next-generation foldables, the category continue to evolve.  Samsung’s biggest foldable competitor is Huawei (pvt), a Chinese company that is under severe US trade restrictions and is tacitly limited to selling its products in China, but in 2021, despite the poor performance of smartphone brands generally, two additional Chinese brands entered the foldable market with the Xiaomi (1810.HK) Mi Mix Fold, and the Oppo (pvt) Find N devices., and thus far in 2022 both Honor (pvt) and Vivo (pvt) (both Chinese brands) have already released their first foldable smartphones.
Much of this activity was generated when Samsung made a concerted effort to promote its foldable phones in 2H last year.  We believe that Samsung felt that enough time had passed from the initial, somewhat sketchy release in 2019, that they could safely assure the public that the durability of these devices had improved significantly, and sales jumped 273% q/q in 3Q ’21 and reached almost 8m units for the 2nd half, relative to a bit over 1m units in 1H.  While the unit volumes for Samsung’s foldable smartphones grew substantially in 2H last year, we note that they are miniscule relative to the roughly 690m mobile units that shipped during that period, but if nothing else, it generated considerable interest from consumers and competitors, and likely lit a fire under those brands that were already developing foldable offerings.
Despite Huawei, and the initial models from Xiaomi and Oppo, Samsung remained the dominant vendor in 2021, as seen in Figure 2, with an 88% share of the market based on unit volume, although a slightly lower share based on value, given Samsung’s Flip foldable line, which brought the price of foldables below $1,000.  Still, Samsung held an 85% share based on sales value, with the 2021 Galaxy Z Flip 3 capturing over 50% of total foldable smartphone unit volume for the year (Figure 4).  Not only did the big jump in volumes spark interest in foldable smartphones from competitors, but it also began a spate of foldable smartphone forecasts that we have compiled to garner some understanding of expectations for the foldable smartphone category going forward.
We note that while we aggregate estimates and forecasts, there are always outliers and some of the years further out might have only one or two forecasts, which would account for the unusual volume jump in 2025 and what would look like a decrease in the following year.  More likely those years would follow a more linear pattern as forecasts become more plentiful for those years.  While unit volumes are certainly a key to understanding the foldable smartphone segment, Samsung’s introduction of the ‘Flip’ model in 2020, and its price reduction in the following year had a significant effect on unit volumes but lowered the ASP across the category.  This is important in that it gives us some indication as to price points that will attract consumers to foldable smartphones in high enough volumes to make them a distinctive smartphone category, which was Samsung’s ultimate objective.
Based on available pricing data, we believe the weighted ASP for foldable smartphones in 2021 was $1,688, which would equate to foldable smartphone revenue of $15.3b.  If we go further and adjust for the ASP for each brand, that figure drops to $14.6b, as the lower priced offering from Samsung carries more weight than others.  That said, we would expect both the unweighted and weighted ASP to decline each year as Samsung increases manufacturing volumes and competitors move to large scale mass production.  That said, given that there is limited seasonal data for the category and that we are rather unsure of the reliability of forecasts in the out years, we hesitate to predict sales figures for the category at this time.  We do note that the first glimpse of foldable smartphone shipments for 1Q ’22 are massively ahead of 2021, although it is an easy compare, but we feel that by the end of 1H, we should have enough of an understanding of the ‘new’ seasonality for foldable smartphones that we might make more reliable estimates for the 2023 and 2024 years.  While we note that hesitation, we do give credit to Samsung for taking a nascent category and making it a viable product differentiator, a task that no other smartphone brand was able to do.  Kudos…

​ToF (Time of Flight) sensors were a hot topic two years ago, and we admit we were certainly intrigued by the ability of these devices to create an image map that allows for accurate depth resolution that can be used by imaging applications to make adjustments to focus based on object location.  LG Electronics was the first to incorporate such sensors in 2014 as part of the LG G3 smartphone, but the first well-known application for ToF in CE products was the Microsoft (MSFT) Kinect motion sensor used in conjunction with Xbox consoles back in 2010, which was a major hit for the company from a publicity perspective.  The real kicker came when Apple adopted the technology in the iPhone, and dozens of smartphone brands have adopted the technology to assist camera applications.
The problem came when Samsung Electronics revealed that the Galaxy Note 20 would not contain a ToF sensor and the Galaxy S21 would also abandon the technology, with Samsung saying it lacked a ‘clear advantage’ for the consumer, which took much of the ToF momentum out of the market.  There was a good reason why Samsung did not focus its attention on ToF, and that has to do with a decision the company made as to the type of ToF sensor it would produce years before, but leave us say that it was not based on a lack of consumer interest but on a profit motive for Samsung.  While not carrying the cache of Samsung’s marketing, ToF sensors are still found in a wide variety of smartphones by Apple, Sony (SNE), Honor (pvt), Motorola (MSI), Huawei (pvt) and others, but are more the focus of those in the automotive space, tying them in to obstacle recognition systems, but it seems they have also found a new home.
Infineon (IFX.GR) and PMD Technologies (pvt) have developed a 3D depth sensing ToF system that will be used in the Magic Leap 2 (pvt), an AR headset designed for enterprise customers that is due out later this year, which will ‘capture the physical environment around the user’ to give the device an understanding of how to interact with the environment.  The system will give the device accurate image coordinates and mapping of hands, faces, and objects in real-time, and is able to work in both bright light and complete darkness.  The sensor chip itself has been optimized to reduce heat and power consumption to maintain battery life.
One feature of the Magic Leap 2 AR headset is its ability to reduce the ambient light surrounding a projected image without changing the image itself.  This allows for better focus on the AR image but also makes it necessary to maintain some perspective on distances without the light that would normally illuminate other objects.  Given that ToF is UV laser based, the lack of light does not affect its ranging capabilities and can provide the necessary depth information to keep users from losing track of where they are relative to the projected image, almost converting the device from an AR to a VR headset.
As a specialty device, especially one geared toward business use, the Magic Leap 2 will not push ToF sensors back into the limelight, but can bring ToF back into the CE nomenclature.  While there will be other silicon based features in the Magic Leap 2 and other AR/VR headsets, the fact that an AR headset can be ‘dimmed’ without losing the depth perception necessary for safe use, is a step toward expanding the use of ToF sensors in the CE space, and we expect over time to see ToF sensors become an integral part of the XR world.

As we have noted previously the India smartphone market is the 2nd largest globally and represents a large opportunity for smartphone vendors who are able to understand the nuances of this vast country.  That said, India’s GNI (2020) was $1,900/capita, which compares with $64,140 in the US, $10,550 in China, $116,440 in Liechtenstein (the highest), $230 in Burundi (the lowest), and $11,077 for the world combined.  In order to cater to the entire Indian population, aside from flagship models, smartphone brands must pack many features into low and mid-priced phones, something Chinese brands are quite good at, and if we look at the top 10 best-selling smartphones in the country, as shown in Table 1, we can see that all but one are under $300 and two of the lowest priced models are among the top 3 sellers.

​Lastweek we noted March and 1Q smartphone shipments in China.  In that note was the line, “5G smartphone shipments in April in China were 16.19m units, up 42.3% m/m but down 41.1% y/y against a very strong March in 2021 (+82.5% m/m & +342.5% y/y) after the 2021 New Year holiday”, which should have read ‘March’ rather than April.  Please excuse the error.  That said, we also noted that typically April smartphone shipments in China have been up 21.8% m/m (5 year average) although down last year, while we noted such a gain might be a bit more difficult this year given the macro circumstances and Chinese COVID lockdowns. 
Our very early data from China indicates that April smartphone shipments were only 17.6m units, which is down 18.0% m/m and down 36.0% y/y far worse than expected.  As these are unofficial and unconfirmed shipment metrics we cannot definitively say how bad April smartphone shipments were in China, but we expect to reduce our full year expectations for Chinese smartphone shipments once we can confirm the April numbers.  With the first four months of this year seeing substantial y/y Chinese smartphone shipment declines, it is getting progressively harder to see a scenario where a recovery could balance out that early weakness.  We believe Apple saw only a slight decline in Chinese smartphone shipments in April and China’s Honor (pvt) brand saw a large y/y gain as it saw only modest sales in April last year, while other major Chinese brands saw shipment decline between 32.0% and 42.7% on a y/y basis, should the April preliminary data prove correct.  The effects of recent COVID lockdowns in Shanghai, Zhengzhou, Shenzhen, and Beijing are being blamed for the poor results, with consumers unable to shop and manufacturers unable to ship.

Smartphone brands always seem to be deadlocked in a battle for share supremacy.  Whether it is units shipped, sell-in, sell-through, units in use, or some other metric, there is always a “Mad Libs”-like headline proclaiming “…and so (Brand A) has now overtaken (Brand B) to become the best-selling smartphone in the (Country) during (Period)…”, only to find that during the next month, quarter, or year, another brand fills the top spot.  Production targets are also a watchword of smartphone brands, with usually grandiose projections being made for the following year during the Thanksgiving/Christmas holidays, which tend to be more a projection of what the brands would like to ship in an ideal environment, rather than what they believe the upcoming environment might support.  But those projections also give smartphone suppliers a broad picture of ‘demand’, and help them adjust their production and capex spending for the upcoming year.
Sources for smartphone data vary considerably, and in many cases do not agree with each other, which is why when we use outside smartphone data we average as many sources together as possible, and while this sometimes keeps our share totals from exactly hitting 100%, it does reduce the influence of outliers and those that include or exclude certain items that other might or might not.  That said, Table 1 shows that the most popular selling phone models are the iPhone 13, released in September of last year and two budget Samsung (005930.KS) phones, one from last year and one from late 2020, a bit surprising, although Apple (AAPL) tends to be in the top 5 every year.

The data in Figure 1 however shows that in most recent quarters, Samsung is the overall global share leader, although that tends to change to Apple in 4Q when the latest iPhone version is released.  More telling is Figure 2, which shows the top 5 smartphone brands by usage, more a reference to the number of active smartphones for the top brands.  That data shows that both Samsung and Apple garner roughly the same usage share, and Huawei (pvt), who has fallen off the top smartphone tables since the US trade sanctions curtailed their smartphone business, is still number 4 when it comes to models currently being used by subscribers.
In recent quarters it has become a challenge for smartphone brands to differentiate themselves from each other, focusing on a particular feature to try to set them apart.  Screen size and resolution was a big feature attraction, but pocket size tends to keep that limited now, and multiple cameras were in vogue a year or so ago, with the current de riguer being phones that have the cameras built into the display, removing those unsightly ‘notches’ that seem to annoy smartphone aficionados.  At least for the time being Samsung seems to have taken the size feature to a new level with their popular foldable smartphone line, with other brands pushing hard to come up with a better foldable mousetrap, an Apple sitting somewhere on the foldable horizon, waiting for the category to stabilize before taking the plunge. 
But with each new model year it seems progressively more difficult for smartphone brands to come up with features that make it easy for users to justify replacing a relative young smartphone and 5G has done little to push that envelope as 5G modems and antennae costs are relatively low.  Gaming features, such as high refresh rates and extended battery life have helped a bit, but the smartphone market overall is getting a bit long in the tooth and needs some impetus to grow.  Perhaps software would be the way in which brands could attract users to upgrade, but that would entail smartphone brands making fewer modifications to Android, giving developers and easier time to ensure compatibility across brand hardware, but what it really comes down to is smartphones need new applications that make them more than just displays.  Some suggest medical applications as a game changing application, and the FDA seems more open to health tracking applications recently, so blood pressure, heart rate, ecg, and blood glucose monitoring could be just what the smartphone market needs to start an upgrade cycle, but few brands seem to be interested in marketing themselves as ‘health conscious’ rather than ‘faster to view YouTube videos’.  Maybe another year of little or no growth might convince them to look for a killer application rather than cameras that rival professional SLRs.

India is the 2nd largest market for smartphones and hosts assembly and component manufacturing for Samsung (005930.KS), Apple, Xiaomi (1810.HK), Vivo (pvt), Oppo (pvt), and others, but the country does not have any capability for producing LCD or OLED displays themselves.  The Indian government has sponsored various incentive programs over the last few years to attract producers to produce displays locally but most panel manufacturers are wary of building a new fab without the specialized infrastructure needed to support such an endeavor.  Such display complexes in Taiwan, South Korea, Japan and China are built around component supplier manufacturers, some of which are situated adjacent to the display facility to reduce transportation issues, and while India does have a plentiful supply of workers for assembly and similar processes, the country lacks both the supporting infrastructure (including reliable power and water) and the skilled talent to operate and maintain display fabs.
Display projects are expensive ($3b to $b typically for OLED) and require considerable government support both logistically and financially, to become a reality, and we have seen a number of display projects in China come and go over the last decade because of a lack of management and operating expertise, even with the support of the government, so when we read that a company with no experience in the display industry is ‘looking to sign an MOU with one Indian state within the next few weeks’ concerning such a project.  The company is Rajesh Exports (RJEX.IN), a Bangalore based company that is, according to the company, the largest processor of gold globally and the world’s lowest cost gold jewelers producer.  The company, also investing in the EV market (no experience there either), is looking to take advantage of the Indian government’s semiconductor incentives through a subsidiary Elest (pvt) in order to gain access to the potential financial funding, but will also fund through ‘internal accruals’, along with private equity infusions after the first year, with the project taking between 6 and 7 years.
So far there are 5 companies who have applied to access the government funding, committing a total of $20.5b, with one company having signed an agreement under the semiconductor and display portion of the incentives, ISMC Digital Fab (pvt) based in Mumbai, for a $3b plant, while other participants continue to look for deals with Indian state governments.  There is no doubt that India is a growing market for CE products and one that can support considerable assembly and board level production, but we are less sure that display projects are currently a viable alternative to China, Taiwan, Korea, or Japan, especially as the need for expertise in OLED displays manufacturing continues to grow.  Not saying it can’t happen, but most of the major display manufacturers have passed on the idea, which leaves the territory open to others, regardless of their experience.  Even with considerable government funding we give such display projects a relatively low chance of success and remind investors that Foxconn (2354.TT), the world’s largest assembler of CE products and the largest assembler in India, still has a mostly empty campus in Wisconsin that was going to be the first LCD fab in the US…still waiting on that one.

Smartphone shipments in China increased by 44.4% m/m in March but declined 40.6% y/y.  At 21.46m units, shipments were 4.5m units (-10.6%) below our estimate.  We note that on a seasonal basis the 5 year average m/m gain for shipments in China in March has been 102.1%, after the Chinese New Year holiday which usually falls in February, so the gain in March, while it seems impressive, is the lowest gain in that month since 2017.  1Q shipments totaled 69.35m units, down 32.2% q/q and down 29.2% y/y which precludes any prediction of a near-term recovery in the Chinese smartphone market.  April is typically up (5 yr. avg.) 21.8% m/m, although last year it was down 23.8% and 2Q overall is typically up 39.9% q/q (5 yr. avg.) although it was also down 22.3% last year.  While our 381.24m (up 8.7% y/y) unit estimate for the full 2022 year is already under pressure, we believe it is a bit too early to make adjustments.
5G smartphone shipments in April in China were 16.19m units, up 42.3% m/m but down 41.1% y/y against a very strong March in 2021 (+82.5% m/m & +342.5% y/y) after the 2021 New Year holiday, so we get little from the single month 5G shipment data in March, although 5G share of total unit shipped remained over 75% in March and through 1Q and seems to have leveled off in a range between 70% and 80% for the last year.  62.8% of new smartphone models were equipped with 5G capabilities in March, the highest percentage since January 2021, which would indicate that the trend to bring 5G capabilities to mid and lower tier smartphones is continuing.  Data from the three major network carriers in China suggests a total of 848.1m 5G subscribers at the end of March, which is more than twice the entire population of the US, but still represents a penetration rate of ~60%, with 1.6m 5G base stations (most recent update from the Chinese government) in operation.
While the scale of China’s 5G development is massive, the restrictions the US government has placed on Huawei (pvt) and ZTE (000063.CH) have given rise to the criticism that the country is more focused on expanding 5G across the broader population than providing high speed 5G, and hints  from China about their plans for C-band bandwidth allocations (higher speed spectrum) have indicated that those plans have been put on hold to focus more on lower speed spectrum that can travel further than C-band.  The trade limitations have also made it more difficult for carriers and smartphone brands to get the more advanced silicon needed for higher speed transport, so we expect the criticism has some truth, but also begs the question as to which path would be more valuable to the country as a whole. A densely populated city like Shanghai already boasts the fastest 5G speeds globally, with China Mobile (941.HK) having a 5G base station for every 1,056 residents in the city of 28.5m, so as 5G is pushed further into smaller cities and rural areas where signal distances are considerably wider between base stations, lower speed spectrum that travels further is the logical solution for a country that is just slightly smaller than Canada, but with almost 38x the population.

You bought a new phone a few months ago as part of a special offer from your carrier that seemed to give you a huge discount on the phone itself and a less expensive plan than you had been using before the offer, but now new and less expensive plans have been popping up as carrier competition increases.  You don’t have a contract and other plans are willing to pay out what you still owe on your new phone, but shifting carriers means you have to change your Sim card which means you have to save Gigs of phone information to the cloud and then hope it can be brought back without any errors, or those Halloween pictures you took of the kids when they were babies will be lost forever.  Is it worth it just to save a few bucks?
With new standards for eSIMs just released by the GSMA, large mobile industry support organization, it will become easier to provision smartphones or other mobile devices without any physical hardware changes, which will allow the eventual elimination of the SIM card, which has been around in some form since 1991.  SIM cards store authentication information needed by networks to identify those devices that are subscribed to that specific network, along with emergency numbers, service numbers and storage for user data, and while the size of physical SIM cards has continued to decline from the original 3.57” x 2.13” card to today’s nano-SIMs (0.48” x 0.315”), they are still a thorn in the side of both mobile operators and their customers.
We note that SIM cards are not only used in smartphones, but the many security systems that use cellular service to communicate with central stations or emergency services must follow the same authentication and identification procedures that are part of smartphones.  Many of those devices were built to use 2G networks, communicating via SMS messages, which forces carriers to continue to maintain 2G networks to allow those devices to function.  Where things get complicated is with IoT, where eventually billions of devices will need to be connected to a network, and those devices will need the same connectivity identification as mobile users, which is why the eSIM was invented.  As an embedded device, the eSIM is part of each smartphone or IoT device and is not removable.  This serves two functions, the first, saving considerable space inside any mobile device, allowing for a smaller size of larger battery or other components to increase functionality.  Second, the eSIm can be programmed over the air, meaning carrier changes can be made easily, without any physical intervention.
We have noted previously that carriers were very wary of the eSIM idea, fearing that mobile users would flip from one carrier to another every time a new discount program was offered, especially heavily discounted programs, but that fear had to be weighed against the opportunities presented by IoT, with its potential for rapid device count expansion, and the cost savings of not having to force the user to go to an expensively staffed physical location.  While we expect that most normal mobile users are unaware of the potential for shifting carriers via eSIM and would still resist the procedure unless it was quite advantageous financially, we do believe that over time younger users will begin to realize that they can switch carriers as often as they would like, especially if they can find a bill aggregator that will allow them to pay whatever carrier they happen to be using during a given month automatically, but that is more of a generational change that will take time, giving carriers the runway to find ways to hold onto e-SIM customers more tightly.
We did a fast check of smartphones that include e-SIM cards, either exclusively or in combination with a physical SIM.  Last year there were 36 phone models that were e-SIM only and 18 that were either dual or triple SIM models.  So far this year there have been 9 e-SIM only models and 16 models that include an e-SIM and at least one physical SIM card, which would indicate that while phone brands are happy to provide e-SIMs, we expect they will be more likely to provide both capabilities until the user base and carriers become more open to using the e-SIM only.  That said, smartphone brands also gain another advantage by using e-SIMs, and that is having to produce less variations of each model, especially variants that are carrier specific, as the e-SIM allows any carrier network to be used with any phone.
All in progress on e-SIM specifications that make it easier for both phone brands and carriers to adopt the technology are good for the consumer and advantageous for the brands themselves.  There are things that continue to slow adoption, primarily the requirement for carriers and service providers to have certified security facilities to manage the encryption keys imbedded in e-SIMs, particularly MVNOs (Mobile Virtual Network Operators – aka service providers that do not own their own network), who are big physical SIM supporters as they fear the ‘churn’ mentioned above.  That said however, we do expect real e-SIM push will come from smartphone brands who are always looking for internal smartphone real estate and a chance to reduce power requirements that the e-SIM would allow.

CE brands use trade-ins as a way to encourage consumers to upgrade their devices and trade-in values can become a significant selling point for smartphones, where programs like Verizon’s (VZ) recent ‘…even broken phones…’ trade-in promotion can embolden those whose phones have case or screen cracks or barely work to trade-in those phones rather than junk them or pay for expensive repairs.  That said, as inflation lowers the buying power of those dollars you have earned, Apple (AAPL) has taken the concept to heart and devalued the trade-in values for many of its products, with the iPhone being the exception. 
While we make light of Apple’s move as inflation related, we expect Apple’s cost to refurbish, transport, or recycle those devices have risen along with food and pretty much everything else, so we look at the change as more of ‘what else is new’ rather than blaming Apple for the global economic situation, but while everyone struggles to meet such rising costs, one would have to assume that reducing the trade-in value of its products will have at least some effect on sales during a period where the external factors are enough to slow sales on their own.  Hopefully other brands do not follow (from a consumer’s perspective), but more likely others will join the trend after a quarter or so of eating the higher costs, but we can hope…
Here are the changes: