Saturday, July 13, 2024
Smartphone news

Apple, Samsung outlook grows darker as another smartphone decline is expected in 2023


Smartphone shipments are now expected to decline in 2023 amid economic uncertainty and inflation continuing to dent discretionary purchases.

On Wednesday, market data analysis firm International Data Corp. cut its 2023 outlook for the smartphone market to a decline of 1.1% to 1.19 billion units. IDC had previously forecast growth of 2.8%, but now says it does not expect a “real” market recovery until 2024. IDC forecasts growth of 5.9% year-over-year in 2024, followed by low-single digit growth for a five-year compound annual growth rate of 2.6%.

“We remain convinced the global market will return to growth in 2024 once we are past these short-term challenges as there is a significant pent-up refresh cycle in developed markets as well as room for smartphone penetration in emerging markets to fuel stable long-term growth,” Nabila Popal, an IDC analyst tracking mobile and consumer devices, said in a statement.

Read: The world is buying fewer devices, and inventories for PCs, phones and tablets are building

Phones powered by Alphabet Inc.’s

GOOG


GOOGL

Android operating system are expected to decline more than Apple Inc.’s

AAPL

iPhones in 2023. IDC forecasts that Android phone shipments will decline 1.2% to 967.7 million units, with iPhone shipments declining 0.5% to 225 million. Apple shares were down 1.2% in Wednesday trading as the Dow Jones Industrial Average

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slipped 0.1%, the S&P 500 index

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declined 0.5%, and the tech-heavy Nasdaq Composite Index

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declined 0.6%.

Longer term, however, IDC expects Android phones, like those made by Samsung Electronics Co.

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to outpace iPhone growth. IDC forecast a five-year CAGR of 2.8% for Android phones, resulting in an estimated 1.12 billion shipments in 2027, compared with a 1.8% CAGR for iPhones for an estimated 247.7 million in 2027 shipments.

Samsung reported a drop in holiday profit from weak demand, and Apple reported its biggest sales decline in more than six years, after warning in November that iPhone 14 shipments would get hit by pandemic-fueled production constraints at a major Foxconn

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facility in China.

IDC does expect 5G to keep growing and be enabled in 62% of smartphones worldwide this year, growing to 83% by 2027, which is good news for Qualcomm Inc.

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The supplier of Snapdragon mobile chips said recently it would be clearing out inventory for the first half of 2023.

IDC also expect prices to start coming down in 2023, after the average selling price surged to $415 in 2022 from $334 in 2019. Analysts expect the average price to settle around $376.

According to IDC analyst Anthony Scarsella, 2023 will be a “year of two halves.”

“Most regions will face double-digit declines in the first half of the year, make a turn into positive territory in the third quarter, and then boost into double-digit growth in the last quarter of the year,” Scarsella said in a statement. “We expect the influx of premium flagships that typically launch in the third and fourth quarters will keep the full year decline from being worse.”

At the end of January, rival analysis firm Gartner forecast that mobile phone shipments would decline 4% to 1.34 billion units in 2023, following an 11% drop last year. Gartner expects a 4.4% decline in total shipments of computerized devices — mobile phone handsets, PCs and tablets — worldwide to about 1.7 billion units.



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