Author: Fiona Craig

Goldman Sachs has revised down its expectations for global smartphone shipments through 2028 while increasing its forecasts for the overall value of the market, reflecting expectations for higher average selling prices and a greater contribution from premium devices.

The bank now expects 1.1 billion smartphones to be shipped globally in 2026, followed by 1.2 billion units in both 2027 and 2028.

Compared with its previous estimates, Goldman reduced projected shipments by 1 million units in 2026, 8 million in 2027 and 0.2 million in 2028.

The forecasts correspond to a 10% year-on-year decline in shipments in 2026 and increases of 2% in each of the following two years. Goldman had previously forecast changes of negative 10% in 2026, positive 3% in 2027 and positive 1% in 2028.

Higher Prices Support Market Value Estimates

Despite its lower volume expectations, Goldman Sachs raised its projections for the value of smartphone sales.

The investment bank forecasts an 8% increase in global smartphone market value to $624 billion in 2026. It expects a further 5% increase to $655 billion in 2027 and growth of 3% to $674 billion in 2028.

The revised estimates incorporate Goldman’s expectations for higher average selling prices, including the effect of increased memory costs and greater demand for devices priced above $600.

As a result, the bank expects market value to increase even as smartphone shipment volumes decline in 2026 and subsequently record relatively limited growth.

Foldable Phone Penetration Still Expected to Increase

Goldman also revised down its projections for foldable smartphones while maintaining its expectation that the devices will account for a larger proportion of the overall market over time.

Foldable penetration is forecast at 3.1% in 2026, 5.7% in 2027 and 6.5% in 2028, compared with previous estimates of 3.6%, 5.9% and 6.8%.

That equates to projected foldable shipments of 35 million, 66 million and 77 million units across the three years. The forecasts are 14%, 4% and 5% below the bank’s previous estimates.

Goldman expects additional product launches from major smartphone manufacturers to contribute to the category’s expansion and included a potential foldable iPhone DUO in its assumptions.

The bank also expects the broader smartphone market to continue shifting towards premium devices, with new form factors and features contributing to its assumptions about higher average selling prices.

All figures represent Goldman Sachs estimates rather than achieved industry results and remain dependent on future demand, pricing and product developments.

Major artificial intelligence developers are likely to continue advancing their models despite growing discussion around security risks, according to analysis from BMO published Friday.

BMO, citing its AI expert, said concerns raised by industry executives about the security of increasingly capable artificial intelligence systems should be taken seriously, particularly regarding the alignment of those systems with human interests.

However, the firm said the continued release of more capable models raises questions about whether developers including Anthropic and OpenAI are prepared to meaningfully slow development.

Open-Access Models Could Face Greater Regulatory Scrutiny

BMO said recent hacking incidents involving artificial intelligence had generally caused limited harm but identified the potential misuse of freely accessible models as an area of concern.

Users have demonstrated that safeguards incorporated into AI systems can sometimes be bypassed, allowing models to produce outputs outside their intended restrictions, according to the firm.

The debate over AI safety has received additional attention after Anthropic chief executive Dario Amodei called for a coordinated slowdown in the development of advanced models, citing potential risks associated with increasingly capable artificial intelligence.

The supplied material said several other AI industry leaders have supported the proposal. AI security was also discussed at a US-China summit during the week.

BMO Forecasts Tighter US and Chinese AI Rules

BMO expects both the United States and China eventually to strengthen regulation governing artificial intelligence, particularly for open-source and open-access models.

The firm’s AI expert said such rules could require prior approval before some open-access models are made broadly available to the public.

BMO’s analysis suggested that both governments could have reasons to restrict the availability of certain AI models. If that occurs, the firm expects leading closed-source developers such as Anthropic and OpenAI could gain additional pricing power.

The potential regulatory changes and their effects on the competitive AI market remain forecasts rather than confirmed developments.

Token Costs Could Reach a Low Around 2030

BMO expects AI token prices to continue declining in the coming years, potentially supporting broader adoption of artificial intelligence tools.

The firm projects that token prices could reach a low around 2030 before changing direction. BMO expects closed-source providers could subsequently raise prices if customers become increasingly reliant on their services.

Actual pricing will depend on factors including technological development, competition, regulation and demand.

BMO also said Meta Platforms has improved its position in artificial intelligence through better utilisation of its AI infrastructure. The firm nevertheless assessed the company as remaining behind Anthropic and OpenAI in terms of AI capabilities.

BMO Sees Continued Demand for AI Computing Hardware

BMO maintained a positive assessment of computing hardware linked to artificial intelligence, pointing to increasing constraints on available computing capacity as adoption expands.

According to the firm, demand for computing resources is being supported in part by users finding that AI systems can perform more tasks than some initially anticipated.

BMO also forecasts changes in employment associated with artificial intelligence, with effects on white-collar roles expected to become more significant by 2028.

Effects on blue-collar employment could become more pronounced during the 2030s, according to the firm’s projections.

BMO linked the difference in timing to Moravec’s paradox, which describes how some physical tasks involving perception and dexterity can be more difficult to automate than certain cognitive activities.

The timing and scale of any employment effects remain uncertain and will depend on how artificial intelligence, robotics and related technologies develop and are adopted.

Gold prices rose on Friday but were still positioned for a weekly decline as markets monitored movements in the US dollar and Treasury yields alongside expectations for Federal Reserve monetary policy.

At 04:59 ET, spot gold increased 0.5% to $4,293.56 an ounce. Gold futures were 0.7% higher at $4,329.97 an ounce.

The US dollar index declined 0.2% to 101.11 during the session but had gained 0.9% over the previous week.

Movements in the dollar can affect demand for gold because the precious metal is denominated in the US currency, making it more or less expensive for buyers using other currencies.

Energy Prices Add to Inflation Considerations

Oil prices moved lower on Friday after rising during the previous session.

The move came as markets considered reports that US and Iranian negotiators were discussing a possible phased arrangement involving the Strait of Hormuz.

According to the reports, Iran would reopen the waterway in exchange for the United States lifting a naval blockade. No final agreement was reported.

Developments affecting energy supplies have kept oil prices elevated, prompting investors to monitor whether higher fuel costs could contribute to inflation pressures.

The Federal Reserve increased interest rates the previous week, marking its first rate rise in three years. Expectations for any subsequent policy changes are being assessed alongside energy prices and other inflation indicators.

US Treasury Yields Move Higher

US government bond yields rose on Thursday, with the 30-year Treasury yield approaching its highest level in more than 20 years.

Higher bond yields can affect the relative demand for gold because investors receive interest income from government debt, while gold itself does not pay interest.

Changes in expectations for Federal Reserve policy and Treasury yields therefore remain among the factors influencing the precious metals market.

ANZ Notes Continued Gold Investment Demand

ANZ analysts said gold investment demand has remained “resilient” despite what they described as increasingly challenging macroeconomic conditions.

The analysts also said there had been “no material liquidation so far.”

In the near term, gold markets continue to monitor oil prices, Treasury yields, the US dollar and expectations surrounding the Federal Reserve’s interest-rate policy.

Crude oil prices moved lower on Friday after reports of discussions between the United States and Iran over a possible phased framework involving the Strait of Hormuz, while markets continued to monitor developments affecting Saudi energy infrastructure.

At 04:02 ET, November Brent futures were 0.4% lower at $106.15 a barrel. US West Texas Intermediate futures declined 1.1% to $93.62 a barrel.

The two benchmarks had gained as much as 5% on Thursday before giving back part of the advance following reports of negotiations between Washington and Tehran.

The earlier increase came after Saudi Arabia said it intercepted six ballistic missiles launched by Yemen’s Iran-backed Houthis towards locations including Taif and the Yanbu area on the Red Sea.

Saudi Export Routes Remain Under Scrutiny

Oil markets continued to monitor Saudi Arabia’s export infrastructure after earlier damage to the country’s East-West pipeline disrupted crude flows to Yanbu.

Yanbu is a major Red Sea export hub connected with oil-producing areas in eastern Saudi Arabia.

The country has been directing additional crude towards Yanbu, although tanker-loading operations at the port had not fully resumed, according to the supplied information.

BMO Capital Markets analysts said Saudi crude supply concerns are “re-emerging, as the restart of the East-West pipeline has yet to translate into a resumption of Red Sea exports, while Houthi attacks continue to intensify.”

The combination of pipeline disruption and missile attacks has kept regional oil infrastructure among the factors being monitored by crude markets.

US and Iran Reportedly Discuss Phased Hormuz Framework

Oil prices reduced their earlier gains following media reports of talks between US and Iranian negotiators in New York.

The reported framework would involve Iran reopening the Strait of Hormuz, while the United States would lift its economic blockade of Iran.

The reports did not indicate that the two sides had reached a final agreement.

Reuters reported that only 17 commodity vessels passed through the Strait of Hormuz during one recent weekend, compared with an average of approximately 125 vessels per day before the war.

Crude shipments have continued through the strait but at reduced levels, according to the report.

US Crude Stocks Increase Against Expectations for a Decline

US inventory figures released during the week showed commercial crude stocks increasing by 3 million barrels in the week ended September 18.

Analysts had expected inventories to decline by 641,000 barrels.

Gasoline stocks decreased by 1.7 million barrels, while inventories of distillates fell by 400,000 barrels.

The increase in crude inventories provided an additional supply indicator as traders continued to monitor developments affecting international oil flows.

Diesel Supply Measures Reportedly Under Consideration

US diesel prices also remained in focus after reaching record levels.

Reuters reported that the Trump administration was considering options to increase the availability of diesel in the domestic market.

Energy Secretary Chris Wright has contacted executives at major refiners to determine their views on a voluntary restriction on diesel exports, according to the report.

The discussions followed separate reports suggesting that a 90-day export ban could be considered. The White House denied that such a ban was planned.

No final decision on voluntary export restrictions had been reported.

European and British wholesale natural gas futures fell on Friday, putting both markets on course for their largest weekly declines since mid-June.

The benchmark Dutch front-month TTF contract and the equivalent UK NBP wholesale gas contract each declined 3.2% during Friday’s session.

Both benchmarks were on track for weekly losses of more than 8%, following increases earlier in September amid uncertainty surrounding energy supplies and shipping routes in the Middle East.

The latest moves came as LNG carriers and commercial shipping operators adjusted transit routes around the Arabian Peninsula in response to disruption affecting regional maritime traffic.

LNG Shipping Routes Adjust to Middle East Disruption

Changes to shipping routes have provided indications that LNG cargoes can continue to reach destination markets despite disruption affecting some established transit routes.

Gas markets have experienced significant volatility in recent weeks alongside developments involving the United States and Iran and concerns about the potential impact on energy infrastructure and shipping in the Persian Gulf.

Friday’s decline also followed gains earlier in the month, with some market participants taking profits ahead of the weekend.

No formal agreement between the United States and Iran has been reached, leaving the outlook for regional energy supplies dependent on further diplomatic and security developments.

EU Gas Storage at Around 70% of Capacity

European gas inventories remain below their levels from the corresponding period last year as the region approaches the winter heating season.

Data from Gas Infrastructure Europe showed underground gas storage across the European Union at approximately 70% of total working capacity at the latest reading cited.

Inventories were around 12 percentage points below levels recorded during the same period last year.

The difference means European gas markets remain exposed to changes in winter demand and potential supply disruptions despite the recent decline in wholesale prices.

Energy prices also remain relevant to the inflation outlook because changes in wholesale costs can feed through to consumer energy prices.

The European Central Bank has identified energy-price volatility as a factor that can affect inflation, leaving developments in European gas markets among the variables being monitored by policymakers.

European equities moved higher on Friday, recovering from a near one-week low reached in the previous session as investors assessed lower crude oil prices alongside elevated government bond yields.

The pan-European STOXX 600 rose 0.7%, leaving the index on course for a weekly gain of approximately 0.15%. If maintained through the close, the advance would end three consecutive weeks of declines.

Germany’s DAX gained 0.8%, while France’s CAC 40 and the UK’s FTSE 100 each rose 0.5%. Italy’s FTSE MIB advanced 1%.

Crude oil prices declined by around 1% during the session.

Bond Yields Remain Elevated

Despite Friday’s gains, European equities continued to face a backdrop of higher government bond yields as markets assessed expectations for monetary policy in the US and Europe.

Sovereign bond yields have risen in recent sessions amid expectations that central banks could maintain tighter monetary policy in response to inflation.

European markets are also monitoring regional natural gas inventories, which were reported to be around 12 percentage points below comparative levels, alongside developments affecting trade and energy supplies in the Middle East.

Lower oil prices during Friday’s session coincided with gains across parts of the travel, leisure and industrial sectors, which are sensitive to changes in energy and input costs.

“I would give sustained energy relief time to feed through to prices, then assess. Before supporting another hike, you really would want a clear case that existing policy is insufficient to bring underlying inflation down,” said Luke Davis, founder and chief market strategist at Bull Market Blueprint.

Corporate Updates Support Individual Stocks

Corporate earnings and company-specific developments also contributed to moves in individual European equities during the week.

These developments came against a broader backdrop of rising sovereign bond yields in both the US and Europe.

Rate-sensitive equities can be affected by changes in government bond yields because higher rates influence financing costs and the discount rates used in company valuations.

Markets Monitor US-China Talks

Investors were also assessing developments surrounding a meeting in Washington between US President Donald Trump and Chinese President Xi Jinping.

Areas being monitored included trade relations, rare-earth supply chains and technology export rules.

“Breakthroughs on long-standing disputes are unlikely, but the meeting could still be a symbolic step forward for future trade talks,” said Lukman Otunuga, head of market research at FXTM.

Middle East Developments Remain in Focus

Energy and currency markets also continued to monitor diplomatic and security developments in the Middle East.

Although crude oil prices declined during Friday’s session, uncertainty remained around the potential for further disruption to energy supplies in the Persian Gulf.

European natural gas storage levels were also being monitored as markets assessed the region’s energy supply outlook.

Airbus (EU:AIR) has identified a fuselage quality issue affecting approximately 500 A321neo aircraft, Reuters reported, citing a source familiar with the matter.

Around 250 of the affected aircraft are already in service, while a further 250 are in production, according to the report.

The issue does not represent a safety risk and aircraft already in service can continue operating, Reuters reported.

Issue Relates to Fuselage Stringer Coating

Airbus identified a “deviation” in the surface protection, or coating, applied to stringers, structural components that run lengthways along the aircraft’s fuselage.

The issue was identified during the summer and was first reported by aviation industry publication the Air Current.

According to the report, the A321XLR, the longer-range variant of the A321neo, is not affected.

Customers are continuing to accept deliveries of affected aircraft without additional work being required before handover. Airbus has also told airlines that there is no immediate requirement to repair aircraft already in service, the report said.

European aviation regulators could subsequently issue a directive requiring repairs to be completed within a specified timeframe, according to Reuters.

Previous A321neo Fuselage Issue Affected Deliveries

The latest issue follows a separate fuselage-related quality problem involving the A321neo that Airbus reported in December.

That issue involved defects in fuselage panels and was also described by Airbus as having no safety implications. Remedial work contributed to several months of delivery delays.

The latest quality issue comes as Airbus works to increase narrow-body aircraft production from approximately 60 aircraft per month to a target of 75 per month.