Global smartphone shipments are expected to fall 3.5 percent to 1.31 billion units this year, market research firm International Data Corp (IDC) said in a report yesterday, as it reversed downward its previous forecast of an annual 1.6 percent increase.
IDC attributed the downward projection to three consecutive quarters of decline in shipments, and increasing supply and demand challenges, the report said.
However, the market researcher expects the decline to be a “short-term setback” and retained its five-year compound annual growth rate projection of 1.9 percent through 2026, as it expects the market to rebound next year, it said.
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“The smartphone industry is facing increasing headwinds from many fronts — weakening demand, inflation, continued geopolitical tensions and ongoing supply chain constraints,” IDC research director Nabila Popal wrote in the report. “However, the impact of the China lockdowns — which have no clear end in sight — are far greater.”
Popal said the smartphone industry is this year facing a double hit from weakening demand in China — the largest market in the world — and persistent bottlenecks in the supply chain, both stemming from rolling COVID-19 lockdowns in some Chinese cities, as the country maintains strict measures to curb the spread of the virus.
As a result, many smartphone brands have cut back orders for this year, including Apple Inc and Samsung Electronics Co, Popal said.
For Chinese vendors Xiaomi Corp (小米), Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃), lockdowns and supply chain issues have delayed the release of new handsets, while waning consumer demand has caused them to reduce shipment forecasts by 15 to 20 percent, Yuanta Securities Investment Consulting Co (元大投顧) said in a note last week.
Yuanta said global shipments would likely decline 2.3 percent to 1.295 billion units this year, from 1.326 billion units last year.
IDC said Chinese vendors are forecast to this year post declines in shipments of 11.5 percent, or 38 million units, accounting for about 80 percent of the global reduction in annual shipments.
That would be better than a 22 percent decline in shipments in central and eastern Europe this year, but far worse than a 1 percent fall in shipments in western Europe, while the Asia-Pacific region, excluding Japan and China, is expected to post 3 percent growth, IDC said.
With shortages in semiconductors — including power management ICs, display driver ICs and discrete Wi-Fi chips — likely to ease in the second half of this year and barring any new setbacks, headwinds facing the industry would disappear by the end of this year, IDC said, adding that the market is expected to recover next year, posting 5 percent annual growth.
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