Weak Demand Continues to Delay a Recovery for the Smartphone Market

Global shipments of smartphones will decline 3.2% in 2023, totaling 1.17 billion units for the year, according to IDC. This is a downward revision from the 1.1% decline forecast in February. The revision is driven by several factors, including a weaker economic outlook and ongoing inflation. Despite the lower forecast for 2023, IDC still expects a market recovery in 2024 with 6.0% year-over-year growth.

"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 with IDC's Mobility and Consumer Device Trackers. "Consumer demand is recovering much slower than expected in all regions, including China. If 2022 was a year of excess inventory, 2023 is a year of caution. While everyone wants to have inventory ready to ride the wave of the inevitable recovery, no one wants to be stuck holding it too long. This also means the brands that take the risk - at the right time - can potentially reap great rewards of share gain.

"Channel inventory remains elevated in many regions and while things have improved, the confidence from suppliers is still low," said Ryan Reith, group vice president, Mobility and Consumer Device Trackers at IDC. "We continue to see more foldable designs in the market, which is a great technological step forward for the industry, but the timing is unfortunate given the headwinds. As many companies continue to focus on reducing budgets the aftermath of those decisions can be long. Now is a time to invest in customers, and what they need and want. Marketing support, sales incentives, and promotional support should be at the top of that list.