Article By : International Data Corp. (IDC)
IDC has revised its worldwide smartphone forecast due to a slower market recovery than previously expected.
International Data Corp. (IDC) has revised its worldwide smartphone forecast due to a slower market recovery than previously expected. According to its latest Worldwide Quarterly Mobile Phone Tracker forecast, global shipments of smartphones will decline by 1.1% in 2023 to 1.19 billion units, down from the 2.8% growth in the prior forecast as market continues to suffer from weak demand and ongoing macroeconomic challenges.
Real market recovery is not expected to occur until 2024, when IDC expects a 5.9% year-over-year growth followed by low single-digit growth leading to a five-year compound annual growth rate (CAGR) of 2.6%.
“With increasing costs and ongoing challenges in consumer demand, OEMs are quite cautious about 2023. 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,” said Nabila Popal, research director at IDC’s Mobility and Consumer Device Trackers. “However, 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.”
5G continues to grow and will account for 62% of smartphones shipped worldwide in 2023, rising to 83% by 2027. Market momentum also continues to build around foldable phones as the segment is expected to grow to nearly 22 million units this year – a 50% increase while the overall market contracts. 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. Finally, smartphone average selling price (ASP) that saw rapid growth over the last few years (from $334 in 2019 to $415 in 2022) will begin to decline starting in 2023 and is expected to reach $376 by end of the forecast period.
“2023 is set to be a year of two halves with the first half piggybacking off the downhill slide from the fourth quarter of 2022,” said Anthony Scarsella, research director with IDC’s Mobility and Consumer Device Trackers. “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. 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.”
