Best Buy: Mobile device sales slowed during holidays
Best Buy said that computing and mobile phone sales were weaker than expected even as the company weathered a rough holiday season better than most retailers.
That factoid from Best Buy isn't going to allay worries about Apple's iPhone sales or the smartphone category overall.
Including mobile phone installment plans, Best Buy said that same store sales for computing and mobile phones fell 7.2 percent for the nine weeks ending Jan. 2.
Best Buy said its U.Ss. revenue fell 0.8 percent during the holiday season. That performance was solid given many tech categories tracked by NPD fell by a wider margin. Best Buy CEO Hubert Joly said that "the domestic decline was primarily driven by the mobile phone category, which was softer than both our expectations and the prior year."
And if mobile phones were excluded Best Buy would have seen revenue increase due to demand for health wearables, home theater and appliances. Online revenue was up 12.6 percent for Best Buy in the holiday season and overall same store sales were down 1.2 percent for the holiday season.
However, Best Buy cut its sales outlook for the current quarter due to the mobile device weakness. The company sees a revenue decline of 1.5 percent instead of its previous projection of flat sales.
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The bigger takeaway from Best Buy is that smartphones just aren't selling. Apple component makers have issued profit warnings for the fourth quarter and analysts have been sounding the iPhone alarm bells for weeks.
Taiwan Semiconductor Manufacturing Co., which makes chips for iPhones and other mobile devices, said its revenue in the most recent quarter will fall nearly 11 percent from a year ago. TSMC said in a statement that "while the China smartphone market shows signs of recovery, customers remain cautious in general."
Although iPhone concerns get the headlines it's worth noting that Samsung has seen soft results too. Meanwhile, up-and-coming companies like Xiaomi are struggling to prove their value to investors.