Smartphone shipments are forecast to decline 3.5 percent to 1.31 billion units in 2022, IDC report said.
Smartphone shipments will achieve 5 percent growth in 2023.
IDC has significantly reduced its forecast for 2022 from the previous projection of 1.6 percent growth, after three quarters of decline and challenges in both supply and demand.
IDC expects this to be a short term set back as the market rebounds to achieve a five-year compound annual growth rate (CAGR) of 1.9 percent through 2026.
Many OEMs cut back orders for this year, including Apple and Samsung. However, Apple appears to be the least impacted vendor due to greater control over its supply chain and because the majority of its customers in the high-priced segment are less influenced by macroeconomic issues like inflation,” said Nabila Popal, research director at IDC.
The ongoing semiconductor supply issues will ease up in the second half of 2022. On the SoC side, 4G SoC supply has been tight, but the market continues to shift towards 5G SoCs, said Phil Solis, research director of IDC.
The problem has been the tight supply of components such as PMICs, display drivers, and discrete Wi-Fi chips. Capacity is being increased for these semiconductors that are made in higher process nodes and newer versions of Wi-Fi chips are being made with newer process nodes.
5G phone business is expected to grow 25.5 percent year over year in 2022 and account for 53 percent of new shipments with nearly 700 million devices and an average selling price (ASP) of $608. Volume expectations for this year were brought down significantly due to increased channel inventory of 5G products in China.
5G is expected to reach a volume share of 78 percent in 2026 with an ASP of $440. 4G ASP is expected to be $170 in 2022, dropping to $113 by the end of the forecast period.
Smartphone ASP will decline from $402 in 2022 to reach $366 in 2026.
Global smartphone production volume in 2Q22 is forecast at approximately 309 million units, which is roughly on par with 1Q22 but the lingering possibility of a subsequent downgrade this quarter cannot be ruled out, says TrendForce.
