Market research firm Canalys has projected a rebound in the smartphone market, with shipments expected to fall by 5 per cent in 2023 compared to a 12 per cent decline in 2022, reaching a total of 1.13 billion units. This is in contrast to the company’s previous forecasts, which projected a 9 per cent decline in shipments in 2023.
The projected improvement is the result of factors including stabilising costs of key components, a positive momentum in consumer demand, and the launch of new, highly anticipated smartphone models. The research also predicts that the global economy will improve in 2023, which would result in increased spending on non-essential goods such as smartphones.
According to Canalys’ global smartphone forecast, the Middle East, Africa, and Latin America are leading the market’s return to growth, with the regions projected to see growth of 9 per cent, 3 per cent, and 2 per cent, respectively. The market is expected to fully rebound in 2024, with shipments projected to reach 1.17 billion units, a 4 per cent increase.
Canalys said that the increasing availability of 5G-enabled phones and expanded 5G coverage in developing countries are two factors driving this projected growth. Other factors include an increase in disposable income, a shift from feature phones to smartphones, and the continued expansion of e-commerce.
In the words of Toby Zhu, a senior analyst at Canalys, the “smartphone industry is clearly coming out of its most difficult period.” Zhu attributes this to consumers’ increased appreciation for the value of their devices, which has led to an increase in average selling prices from $332 in 2017 to $440 today. Zhu also noted that this increased valuation was due to the rise of premium smartphones and their high-end features, such as foldable screens, high refresh rate displays, and advanced camera systems.
According to Sanyam Chaurasia, another senior analyst at Canalys, the smartphone rebound will be driven by upgrades in emerging markets, as smartphones continue to play a vital role in connectivity, entertainment, and productivity. Chaurasia also noted that one-third of all smartphones shipped in 2024 will be sold in Asia Pacific, thanks to strong demand for upgrades. Canalys noted that Chinese brands such as Honor and Xiaomi are expected to aggressively expand their operations outside of Greater China, thanks to improved business conditions. This expansion is being driven by a number of factors, including the easing of regulatory pressure, the improvement of supply chain constraints, and the growing appeal of the brands’ products outside of China.
