Expectations for the global smartphone shipments have been reduced following “weak demand and ongoing macroeconomic challenges”, with the market now expecting to decline by 1.1 per cent in 2023, to 1.2 billion units.
The forecast from research firm IDC is quite a far cry from its previous prediction, which expected growth of 2.8 per cent.
“Real market recovery is not expected to occur until 2024, when IDC expects 5.9 per cent year-over-year growth followed by low single-digit growth leading to a five-year compound annual growth rate (CAGR) of 2.6 per cent,” the firm claimed.
Nabila Popal, research director with IDC's Mobility and Consumer Device Trackers, said that original equipment manufacturers (OEM) are to be “quite cautious” during this year due to increasing costs and ongoing challenges in consumer demand.
“While there is finally some good news coming out of China with the recent reopening, there is still a lot of uncertainty and lack of trust, which results in a cautious outlook," she said.
In fact, Anthony Scarsella, research director with IDC's Mobility and Consumer Device Trackers, said that “2023 is set to be a year of two halves,” with the coming off the back of the decline seen in the fourth quarter of 2022.
"Most regions will face double-digit declines in the first half of the year, make a turn into positive territory in the third quarter and then boost into double-digit growth in the last quarter of the year,” he said.
“We expect the influx of premium flagships that typically launch in the third and fourth quarters will keep the full year decline from being worse."
The longer-term view however remains optimistic, with Popal adding that things are anticipated to turn around next year.
"We remain convinced the global market will return to growth in 2024 once we are past these short-term challenges as there is a significant pent up refresh cycle in developed markets as well as room for smartphone penetration in emerging markets to fuel stable long-term growth," she said.
The forecast also predicted that the average selling price (ASP) of smartphones, which the firm claimed rapidly grew from US$334 in 2019 to US$415 in 2022, will start to decline this year and go down to US$376 by the end of the forecast period.
Additionally, 5G-enabled smartphones are expected to make up 62 per cent of all shipments in 2023 and have been forecast to increase to 83 per cent by 2027.
The demand for foldable phones will also increase, reaching nearly 22 million units this year – a 50 per cent increase.
“This segment will continue to grow as costs decrease and more OEMs launch this form factor, as we have seen this week with multiple Android foldable launches at Mobile World Congress,” IDC said.