Global smartphone shipments will plummet in 2023 due to economic headwinds and lukewarm consumers

Global smartphone shipments will plummet in 2023 due to economic headwinds and lukewarm consumers

Global smartphone shipments are expected to decline in 2023, a departure from previous growth forecasts, as macroeconomic challenges and weak consumer demand weigh on the sector, according to research from Counterpoint Research.

Shipments of the first consumer electronics device are expected to decline 2% annually to 1.262 billion units in 2023, from around 1.240 billion this year, the Hong Kong-based research firm said in its latest market update. .

This is a reversal from an earlier forecast of a 6% increase in year-on-year shipments next year. The estimated figure for 2022 would be down 11% from the 1.391 billion units shipped last year, and down 15% from 1.471 billion in 2019, the year before the Covid-19 pandemic hit. showed the study.

The market is also expected to underperform in the first half of 2023 – weaker than expected – and not recover until the third quarter, he said.

Factors ranging from macroeconomic issues to challenges stemming from geopolitical events will continue to hold back the sector, wrote Peter Richardson, vice president of Counterpoint, in the report.

“Persistent inflation, expectations of future interest rate hikes, falling corporate profits, the stalled Chinese economy, the protracted war between Ukraine and Russia, political unrest in Europe and a new round of export controls on China from the United States, all contributing to the downward adjustment in smartphone market forecasts,” he said.

“Original Equipment Manufacturers [OEMs] focusing on the higher-end segment, which is more resilient than the low-to-midrange, are better positioned to face these challenges, with deep technological expertise and diversified businesses capable of weathering the storm.

Global smartphone shipments fell to around 301 million units in the third quarter of 2022, the lowest level in eight years, as geopolitical factors affecting the global economy continued to dampen market demand, Counterpoint said in a statement. its latest quarterly update.

In the second quarter of this year, shipments fell below this level – the first time since the start of Covid-19 in 2020.

As such, the industry is on track for another annual decline: in the first nine months of this year, smartphone shipments reached around 921.9 million and are not expected to top 1.39 billion. units in 2021, which marked the first positive growth since 2017.

The pandemic has triggered disruptions in supply chains due to widespread lockdowns that have lasted for months, leading to parts shortages that have affected smartphone makers. The market, however, is gradually recovering.

Smartphone shipments in 2022 were boosted by a recovery from Samsung Electronics and Apple, the world’s largest mobile phone makers, helping them to surpass the 300 million mark in the three months to September.


Replacement cycles, or the average time consumers take before buying new smartphones, are expected to reach 43 months in 2022, the highest level ever, said Liz Lee, associate director at Counterpoint.

“Given an increase in average selling prices and a resulting long replacement cycle, we expect annual smartphone shipments are unlikely to return to pre-Covid levels in the near term,” he said. she declared.

“Although the replacement cycle will be shortened sequentially from next year, it will remain above 40 months.”

Meanwhile, the global 5G device market is expected to show “healthy growth” from 2024 as manufacturers are expected to accelerate the release of low- and mid-priced 5G devices, Counterpoint said.

This will be due to smartphone makers and telcos aggressively promoting 5G, as well as “good enough” incentives in many markets to convince consumers to switch to the current mobile communications standard.

New smartphone form factors, including foldables, are also expected to fuel the growth of the high-end smartphone segment.

“With more OEMs entering the foldable segment, the market will see prices for these phones stabilize and the foldable segment grow to become more prominent along with the 5G segment,” Counterpoint said.

Updated: December 10, 2022, 10:27 a.m.

#Global #smartphone #shipments #plummet #due #economic #headwinds #lukewarm #consumers

Leave a Comment

Your email address will not be published. Required fields are marked *