China lockdowns and other global macro-economic factors will shrink the global smartphone market shipments by over 3 per cent this year to 1.36 billion units, a new report has claimed.
Last year, the global smartphone shipments grew 4 per cent (on-year) to reach 1.39 billion units.
According to Counterpoint Research, the overall supply situation is expected to gradually improve in 2022 compared to the previous year, although shortages of several parts have not been resolved yet.
On the macroeconomic front, expectations for recovery are now falling sharply and more concerns are spreading centered on China’s prolonged recession and the Ukraine crisis.
“For the long term, we continue to expect a steady migration from feature phones to smartphones, and 3G/4G to 5G smartphones. However, the recent global inflation trends are hitting the consumer demand and smartphone BoM costs, acting as a risk for the 2022 smartphone market,” said Peter Richardson, Vice President at Counterpoint Research.
Consumer sentiment has contracted significantly recently due to the spread of global economic uncertainty and surging 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.
“However, the outlook for a smartphone market recovery in the second half still stands. Besides, we believe that new foldable smartphone launches, led by Samsung, will be able to stimulate demand in the premium segment,” said senior analyst Liz Lee.
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,” said Lee.