According to the latest forecast by International Data Corporation’s (IDC’s) “Worldwide Quarterly Mobile Phone Tracker”, the shipments of smartphones will decline 6.5 per cent to 1.27 billion units in 2022. The decline is predicted to be on account of inflation, geopolitical tensions, and other macroeconomic challenges that have significantly dampened consumer demand.
As a result, the latest forecast figures represent a reduction of 3 percentage points from previous projections. However, IDC expects the setback to be short term and the market to rebound in 2023 with 5.2 per cent growth year over year and, in the long term, a 5-year compound annual growth rate (CAGR) of 1.4 per cent.
Commenting on the study, Nabila Popal, research director, IDC’s “Worldwide Mobility and Consumer Device Trackers”, said, “The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market. High inventory in channels and low demand with no signs of immediate recovery has original equipment manufacturers (OEMs) panicking and cutting their orders drastically for 2022. 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. Despite the unit decline, average selling prices (ASPs) have grown 10 per cent year over year in Q2 and are forecast to grow 6.3 per cent for the full year. The premium segment (over $800) has proved resilient to the economic turmoil and has grown four percentage points in share to 16 per cent of the total smartphone market and will continue to grow. This includes foldable devices, which is the fastest growing segment today and expected to increase 70 per cent year over year in 2022 to reach 13.5 million units shipped.”
Meanwhile, from a regional view, the economic crisis has hit emerging markets, where a majority of the shipment volume comes from sub-$400 devices, significantly harder. As per IDC forecast, Central and Eastern Europe (CEE) is expected to be down 17.4 per cent in 2022 and Asia/Pacific (excluding Japan and China) (APeJC), previously forecast to grow 3.0 per cent, is now expected to drop 4.5 per cent in 2022. However, the most significant volume drop is coming from China, which is now forecast to decline by 12.5 per cent or roughly 41 million units, contributing almost half of the overall reduction in 2022.
In contrast, the developed markets like North America (USA and Canada) and Western Europe are forecast to do much better in 2022. The U.S. will be relatively flat at 0.3 per cent growth year over year while the Canadian market will fare slightly better with 3.2 per cent growth and only a slight 0.7 per cent decline for Western Europe.
Global shipments of 5G devices are expected to grow 23.6 per cent year over year in 2022 and account for over half (54 per cent) of all shipments with 688 million devices and an ASP of $616. In the long term, 5G is projected to reach a volume share of 79 per cent in 2026 with an ASP of $444. In contrast, the 4G ASP will hit $176 in 2022, dropping to $106 by the end of the forecast period. As a result, the overall smartphone ASP will decline from $413 in 2022 to $373 in 2026.
Additionally, Anthony Scarsella, research director, IDC’s “Worldwide Mobility and Consumer Device Trackers”, said, “The resilience of the market’s upper echelon has been a testament to the success of iOS, which has not witnessed a full-year shipment decline since 2019. Despite the overall market decline, iOS shipments will remain positive in 2022 with 0.5 per cent growth. Additionally, the operating system will display minimal growth throughout the forecast period with ASPs hovering well above $950. As for the world’s most popular operating system, Android, 2022 will bring a near 8 per cent decline but will rebound nicely in 2023 with 6.2 per cent growth. Unfortunately, the low-end of the market has not fared well in 2022, as shipments of Android-based devices under $200 declined 22.4 per cent in Q1 and 16.5 per cent in Q2. On a positive note, devices above $1000 have displayed 35.2 per cent growth, thanks to premium flagships and the recent success of foldable devices in the market.”
