Predictions for worldwide smartphone shipments have dropped further to reach the lowest volume in a decade in 2023.
This is according to IDC’s Worldwide Quarterly Mobile Phone Tracker, which forecasts a 4.7 per cent year-over-year decline in 2023, to 1.15 billion units.
This is a downward revision from IDC’s previous forecast of a decline of 3.2 per cent, which it said is driven by a weaker economic outlook and ongoing inflation causing lower consumer demand and longer refresh cycles.
"Although inventory levels have normalised, the majority of OEMs [original equipment manufacturers] remain extremely cautious in their business planning for the short term, yet again kicking the recovery can down the road," said Nabila Popal, research director with IDC’s Mobility and Consumer Device Trackers.
Despite the lower forecast, IDC expects the market to recover in 2024 with 4.5 per cent year-over-year growth, followed by growth in the low single digits through the remainder of the forecast, resulting in a five-year compound annual growth rate (CAGR) of 1.7 per cent.
"While the market will undoubtedly return to growth, longer refresh cycles are tapering the rate of growth over the long run, preventing the total available market from reaching pre-COVID levels,” Popal continued.
“In such an environment, it is crucial for vendors to strategise to increase their value and focus on channel incentives and promotions to attract consumers and bring them home by providing flexible financing options.
“As consumers hold onto their devices longer, the bright side is they are willing to pay more, which will in turn help average selling prices to rise for the fourth consecutive year in 2023.”
When looking at operating systems (OS), IDC expects shipments of iOS devices to see 1.1 per cent growth in 2023, reaching an all-time share high of 19.9 per cent.
Meanwhile, Android devices are forecast to decline 6.0 per cent in 2023, indicating that iOS remains more resilient to macro challenges compared to Android, said group vice president of IDC Mobility and Consumer Device Trackers Ryan Reith.
"During a time when the entire market is struggling, it speaks volumes to once again see Apple going the opposite direction," Reith added.
"Attractive trade-in offers and on-going expansion of 'buy now, pay later' programs have helped the premium segment of the market more than anything, especially in more developed markets.”