Global smartphone shipments are expected to fall 6.5 percent to 1.27 billion units this year, market research firm International Data Corp (IDC) said in a report last week, slashing its June forecast of a 3.5 percent year-on-year fall.
IDC attributed the downward revision to rising inflation, geopolitical tensions and other macroeconomic challenges that have significantly weakened demand, the report said.
While the market researcher views the decline as a short-term setback and expects the market to rebound next year with a 5.2 percent annual increase in terms of shipments, it cut its five-year compound annual growth rate projection to 1.4 percent through 2026, from the previous estimate of 1.9 percent.
Photo courtesy of Samsung Electronics Co
“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” IDC research director Nabila Popal wrote in the report.
However, many smartphone brands have drastically cut back orders for this year amid “high inventory in channels and low demand with no signs of immediate recovery,” Popal wrote.
“The events of the last twelve months have shaved 150 million units off the market for 2022 from our forecast in the second quarter of 2021,” she wrote.
IDC said the slowdown hit emerging markets harder than developed markets, with China likely to see the most significant volume drop of 12.5 percent, or about 41 million units, which amounts to almost half of the overall reduction in global shipments this year.
Shipments in central and eastern Europe are expected to decline 17.4 percent, while those in the Asia-Pacific region excluding Japan and China are predicted to drop 4.5 percent from the previous forecast of 3 percent growth, the report said.
In contrast, shipments in the US are forecast to edge up 0.3 percent and the Canadian market is to see shipments increase 3.2 percent this year, while western Europe would post a 0.7 percent decline, it said.
“Despite the unit decline, average selling prices have grown 10 percent year over year in Q2 and are forecast to grow 6.3 percent for the full year,” Popal wrote.
In the smartphone market, the premium segment has proved resilient to the economic turmoil and has grown 4 percentage points to 16 percent of the overall market and would continue to grow, she said.
The segment refers to smartphones priced at US$800 or more per unit, with foldable devices the fastest-growing segment that would see shipments increase 70 percent year-on-year to 13.5 million units this year, she added.
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