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Global smartphone shipments are expected to fall 3 per cent year-on-year in 2022, owing to economic headwinds, according to Counterpoint Research’s quarterly forecast.
The number of smartphones shipped globally in 2022 is expected to be 1.36 billion, down from 1.39 billion in 2021.
Though shortage of parts persists, the overall supply situation for smartphones is expected to gradually improve in 2022.
“On the macroeconomic front, expectations for recovery are now falling sharply and more concerns are spreading centred on China’s prolonged recession and the Ukraine crisis. Therefore, we expect this year’s smartphone market to contract,” the report said.
As per the report, the lockdowns imposed by China as part of its zero-tolerance approach towards the latest Covid-19 resurgence have been slowing its economy, besides causing a chain reaction across the global economy due to its closed factories and rising logistics costs.
Impact of inflation
Further, consumer sentiment has contracted significantly owing to the global economic uncertainty and rising inflation due to the prolonged Ukraine-Russia war.
“Due to the US dollar strength amid rising US interest rates, emerging economies will also face capital flight and inflation,” it added.
The report also forecast weaker-than-expected Q2 2022 results. However, the outlook for a rebound in H2 stands.
Push for 5G
Peter Richardson, Vice-President at Counterpoint Research, said, “For the long term, we continue to expect a steady migration from feature phones to smartphones, and 3G/4G to 5G smartphones. As efforts to spread low- and mid-priced 5G devices continue, the global market for 5G devices is expected to show healthy growth and act as a significant driver of the overall smartphone market.”
“Operators are actively promoting 5G, and the incentives are sufficient in many markets to cause consumers to switch to the new technology. However, the recent global inflation trends are hitting consumer demand and smartphone BoM costs, acting as a risk for the 2022 smartphone market,” Richardson added
Senior analyst Liz Lee added, “However, the outlook for a smartphone market recovery in the second half still stands. At the end of May, the Chinese government convened a meeting for large-scale economic stability countermeasures.”
“The government is expected to implement more aggressive policies to stimulate the economy in the second half,” Lee added.
Besides, the new foldable smartphone launches, led by Samsung, are likely to stimulate demand in the premium segment, Lee said.
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