IDC analysts took another look at their smartphone forecast for all of 2023 and decided that weak consumer demand for iPhones and Galaxies will be worse than earlier anticipated.
In fact, IDC forecast on Wednesday that global shipments will decline by 3.2% for the year, compared to a decline of 1.1% forecast in February.
The revision is driven by a weaker economic outlook and ongoing inflation, IDC said in a statement. Both factors lead to worsening consumer demand.
“Our conversations with channels, supply chain partners and major OEMs all point to recovery being pushed further out and a weaker second half of the year,” said Nabila Popal, research director for IDC’s Mobility and Consumer Device Trackers.
“Consumer demand is recovering much slower than expected in all regions, including China,” Popal added. “If 2022 was a year of excess inventory, 2023 is a year of caution.”
Ryan Reith, group vice president at IDC, said supplier confidence is low, even as elevated channel inventory has improved somewhat. He said more foldable designs are being released by manufacturers but called the timing “unfortunate given the headwinds.” Google recently announced a Pixel Fold design selling for nearly $1,800.
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If phone makers continue to focus on reducing their budgets, it can take a long time to adjust, he said. “Now is the time to invest in customers and what they need and want,” Reith said.
With a 3.2% decline for 2023, IDC said 1.17 billion smartphones will have shipped. Even with the downturn, IDC expects a market recovery in 2024, with 6% year-over-year growth.
IDC tracked more than 1.3 billion smartphones shipped in 2021, which dropped to 1.2 billion in 2022 and will dip further in 2023 to 1.17 billion. It will take until 2027 for shipments to nearly reach the 2021 shipment total, IDC said.
One positive trend IDC noticed is that the average sales price for a 5G smartphone has dropped from $661 in 2021 to $584 in 2023, with an anticipated decline into 2027 when the ASP for a 5G smartphone is expected to reach $433.
