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China to drag global smartphone market down this year, IDC says

The world’s biggest smartphone market is expected to shrink by 38 million units this year, down 11.5% on 2021 and accounting for about four-fifths of the global reduction in shipment volume.

June 02, 2022 / 01:40 PM IST
Xiaomi Corp. smartphones displayed inside the company's store in Shanghai, China, on Tuesday, Aug. 24, 2021. Xiaomi is scheduled to release earnings results on Aug. 25. Photographer: Qilai Shen/Bloomberg

Xiaomi Corp. smartphones displayed inside the company's store in Shanghai, China, on Tuesday, Aug. 24, 2021. Xiaomi is scheduled to release earnings results on Aug. 25. Photographer: Qilai Shen/Bloomberg

China’s cooling economy is going to be the biggest drag on worldwide smartphone shipments this year, according to the latest IDC forecast, which points to a 3.5% global decline in 2022.

The world’s biggest smartphone market is expected to shrink by 38 million units this year, down 11.5% on 2021 and accounting for about four-fifths of the global reduction in shipment volume. Only the war-stricken Central and Eastern Europe region is projected to shrink faster, as the compounding effects of Covid-19 lockdowns, geopolitical tensions and surging inflation cool consumer sentiment.

“The lockdowns hit global demand and supply simultaneously by reducing demand in the largest market globally and tightening the bottleneck to an already challenged supply chain,” IDC research director Nabila Popal said in the report. “Apple appears to be the least impacted vendor due to greater control over its supply chain and because the majority of its customers in the high-priced segment are less influenced by macroeconomic issues like inflation.”

Apple Inc. is keeping its iPhone production flat this year, having previously been expected to increase output as it worked toward a significantly upgraded iPhone 14 generation, Bloomberg News has reported. The company’s steady performance is in contrast to its Chinese competitors, which recently suffered their worst drop in shipments since the outbreak of the pandemic.

IDC’s global forecast is a reversal from its previous prediction for 1.6% growth. Still, IDC sees headwinds for the smartphone industry dying down in the latter half of the year -- barring any additional setbacks -- and projects a rebound to 5% growth in 2023. The market researchers also see growth in the wider Asia-Pacific region, excluding China and Japan, which is likely to finish the year 3% up, according to their projections.
Bloomberg
first published: Jun 2, 2022 01:40 pm
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