According to Counterpoint’s Market Outlook Service study, global smartphone market is expected to witness 2 per cent year-on-year (Y-o-Y) growth in 2023. The latest forecast has been revised downwards from the previous forecast of 6 per cent Y-o-Y growth in 2023, as macroeconomic headwinds and consumer weakness continue to pressure the smartphone sector. It is expected to continue underperforming through the first half (H1) of 2023 and only start to grow from third quarter (Q3) of the calendar year (CY) 2023.

Commenting on the release of the report, Peter Richardson, vice president, Counterpoint Research, said, “Persistent inflation, expectations of future interest rate hikes, souring corporate earnings, China’s stalled economy, the protracted Ukraine-Russia war, political turmoil in Europe, and a sweeping new set of export controls on China from the US, all contributes to the downward adjustment of the smartphone market forecast. OEMs focusing on the premium segment, which is more resilient than the low to mid-end, are better positioned to deal with these issues, with deep technological expertise and diversified businesses capable of weathering the storm.”

Meanwhile, Liz Lee, associate director, Counterpoint Research, said, “Given an increase in ASP and a consequent long replacement cycle, we expect the annual smartphone shipments are unlikely to come back to pre-Covid levels for the short-term. This year’s replacement cycle is estimated to reach 43 months, its highest level ever. Although the replacement cycle gets shortened sequentially from next year, it will stay above 40 months.”

The report further noted that starting 2024, the global market for 5G devices is expected to show healthy growth as efforts to spread low and mid-priced 5G devices continue. Operators are actively promoting 5G, and the incentives are sufficient in many markets to cause consumers to switch to the new technology. The new form factors, such as foldables, will also drive the growth of premium smartphones. With more OEMs entering the foldable segment, the market will see the prices of these phones stabilising and the foldable segment growing to become more prominent along with the 5G segment.