The market for smartphones is not expected to recover this year as shipments are forecast to decline 6.5% to 1.27 billion units, according to new research from International Data Corp (IDC).
IDC said the reasons for the decline in smartphone shipments include:
- Record inflation
- Geopolitical tensions
- Macroeconomic challenges
- Dampened consumer demand
The good news is that IDC expects the setback to be short-lived with a rebound in 2023 expected at 5.2% growth year-over-year. The long-term forecast is good as well as IDC predicts a compound annual growth rate (CAGR) of 1.4%.
"The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” said Nabila Popal, research director with IDC's Worldwide Mobility and Consumer Device Trackers. “High inventory in channels and low demand with no signs of immediate recovery has OEMs panicking and cutting their orders drastically for 2022. The events of the last 12 months have shaved 150 million units off the market for 2022 from our forecast in the second quarter of 2021.”
While units are declining, average selling prices (ASPs) are forecast to grow 6.3% in 2022 with the premium segment remaining steady despite economic issues, Popal said. Additionally, foldable devices is the fastest growing segment with an expected rise of 70% year-over-year in 2022 to reach 13.5 million units.
Shipments of 5G devices continue to expand with growth to reach 23.6% year-over-year in 2022 and account for 54% of all shipments. This is about 688 million devices. ASPs will be $616 but this will fall over the next five years to about $444, IDC said.
5G shipments is expected to reach a 79% volume share by 2026, IDC said.
The full report can be found in IDC’s Worldwide Quarterly Mobile Phone Tracker.