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The 'Smartphone Effect' Is Weakening

  • Smartphone upgrades have helped drive strong year for exports
  • Economists say growth in Asia trade could start slowing
Customers stand in line ahead of the sales launch of Apple Inc.'s iPhone 7 and iPhone 7 Plus in Shanghai, China, on Sept. 16, 2016
Photographer: Qilai Shen/Bloomberg

The rush to upgrade smartphones may be ebbing, prompting economists to dial back the outlook for Asian exporters.

Early indications, including signs of disappointing orders, point to a mixed reaction to the latest iPhones, hurting the share prices of Apple Inc.’s Asia-based suppliers. Given that smartphone improvements help power demand for electronics components from supply-chain powerhouses such as South Korea, Japan and Taiwan, a weaker upgrade cycle would have macro-economic implications too.