August 12, 2022
Global smartphone shipments expected to decline 3.5 percent in 2022 on weak demand: IDC


According to a report, global smartphone shipments are expected to decline by 3.5 percent in 2022 to 1.31 billion units. The decline has been attributed to “increasing challenges in both supply and demand”. As a result, original equipment manufacturers, including Apple and Samsung, have turned back this year’s orders. However, the market research firm claims that Apple is the least affected vendor. 5G devices are also expected to grow 25.5 percent year-on-year (YoY) in 2022.

According to IDC Worldwide Quarterly Mobile Phone TrackerGlobal smartphone shipments are expected to decline by 3.5 percent this year. IDC says it has significantly lowered its forecast for 2022 from its previous estimate of 1.6 percent growth after three consecutive quarters of decline in shipments due to increasing challenges in both supply and demand. However, this is expected to be a short-term setback as the market is projected to achieve a five-year compound annual growth rate (CAGR) of 1.9 percent through 2026.

IDC Global Smartphone Shipment IDC IDC Smartphone Shipment

5G devices are also expected to grow 25.5 percent year-on-year in 2022
photo credit: idc

Nabila Pople, director of research with IDC’s Worldwide Mobility and Consumer Device Trackers, stressed that the smartphone industry is “affected by weak demand, inflation, continued geopolitical tensions and supply chain constraints.” This has had a huge impact on China’s lockdown as well as smartphone shipments. “The lockdown simultaneously impacted global demand and supply by reducing demand in the largest market globally and easing bottlenecks to an already challenging supply chain,” Pople said.

IDC says it expects these challenges to subside by the end of this year and the market will recover to 5 percent growth in 2023.

When it comes to OEMs, supply and demand challenges have forced many of them, including Apple and Samsung, to withdraw orders this year. The research director says Apple appears to be the least affected vendor. This is because Apple has more control over its supply chain. Another reason for the less impact on the Cupertino-based company is that most of its customers in the high-priced segment are less affected by macroeconomic issues such as inflation.

Another research director at IDC says that while the supply of 4G SoCs is tight, the market continues to move towards 5G SoCs. “The big problem is the tight supply of components like PMICs, display drivers and discrete Wi-Fi chips. Capacity is being increased for these semiconductors which are built in higher process nodes and new versions of Wi-Fi chips are being built with new process nodes. At the same time demand is falling. Combined, these supply and demand changes will bring the market more into equilibrium,” said Phil Solis, director of research in IDC’s Enabling Technologies and Semiconductors team.

5G devices are tipped to grow 25.5 per cent in 2022 and 53 per cent new shipments with approximately 700 million devices and an average selling price (ASP) of $608 (approximately Rs 47,150). The volume share of 5G is expected to reach 78 per cent in 2026 with an ASP of $440 (approximately Rs 34,100). 4G phones esp, on the other hand, is expected to be $170 (approximately Rs 13,200) in 2022, which will drop to $113 (approximately Rs 8,760) by the end of the forecast period.

As far as region-wise segregation is concerned, the biggest drop is expected in 2022 with shipments down 22 per cent in Central and Eastern Europe. China is projected to decline 11.5 percent, which accounts for about 80 percent of the global decrease in shipment volume this year. The decline in Western Europe is expected to be 1 per cent. In contrast, other regions including Asia/Pacific (excluding Japan and China) will see positive growth this year (around 3 per cent).


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