Global smartphone market to hit decade low in 2023 but Apple could take top spot, research shows

Global smartphone shipments this 12 months are on monitor to be the worst in a decade, Counterpoint Research stated in a report on Thursday, because the market is dragged down by the U.S. and China.

However, Apple might grow to be the largest participant in smartphones this 12 months by shipments, as its high-end iPhone gross sales stay resilient, the report added.

Measuring anticipated demand, shipments are usually not equal to gross sales and signify the variety of gadgets that smartphones distributors ship to retailers.

Counterpoint Research stated it expects smartphone shipments in 2023 to say no 6% year-on 12 months to 1.15 billion gadgets.

“Asia is one of the major hurdles to positive growth, as headwinds halt the economic turnaround anticipated for China at the start of the year, and the broader region experiences intensifying declines across emerging markets,” Counterpoint stated in its report.

China’s economic system this 12 months has sputtered and never lived as much as expectations of a fast restoration, whereas customers stay cautious on spending.

Chinese smartphone purchases, which used to common 450 million gadgets a 12 months at their peak, have shrunk to 270 million per 12 months — contributing as a significant trigger behind the decline in world smartphone gross sales, Karn Chauhan, senior analyst at Counterpoint Research instructed CNBC through electronic mail.

North America continues to dampen the worldwide restoration, with a “disappointing” first half of the 12 months setting the area up for double-digit full-year declines, Counterpoint’s report stated.

“Despite strength in the jobs market and inflation falling, consumers are hesitant to upgrade their devices, pushing replacement rates for the US and globally to record highs,” the analysis agency stated.

The premium finish of the market with increased priced gadgets has remained fairly resilient, regardless of a fall in total smartphone shipments.

Apple is gearing as much as launch its subsequent flagship smartphone — the iPhone 15 — in September. That might give the corporate a powerful exhibiting going into the top of the 12 months, Counterpoint stated.

“But we’re watching Q4 (fourth quarter) with interest because the iPhone 15 launch is a window for carriers to steal high-value customers. And with that big iPhone 12 installed base up for grabs promos are going to be aggressive, leaving Apple in a good spot,” Jeff Fieldhack, analysis director for North America at Counterpoint Research, stated in a press launch.

Chauhan stated the analyst agency expects Apple shipments to be up “marginally” year-on-year, given demand in markets like China and different Asian international locations the place there’s a “growing premiumization trend” — which means that persons are prepared to pay the next worth for telephones.

Apple’s iPhone vary helps Apple play within the premium section of the smartphone market.

Counterpoint Research stated that the U.S. firm might this 12 months take the highest spot globally by way of annual shipments for the primary time ever. Samsung was the largest participant by market share within the second quarter of the 12 months.

“It’s the closest Apple’s been to the top spot.  We’re talking about a spread that’s literally a few days’ worth of sales,” Fieldhack stated. “Assuming Apple doesn’t run into production problems like it did last year, it’s really a toss up at this point.”

Apple has made a push into new markets, with India being a focus for the corporate in 2023, because it tries to capitalize on native customers’ urge for food for premium gadgets. The U.S. firm opened its first bodily shops in India this 12 months, with CEO Tim Cook visiting the nation.

Apple’s skill to develop out there can even issue into whether or not it finally ends up because the primary smartphone maker this 12 months, based on Chauhan.

“The reception of the iPhone 15 and growth in non-core iPhone markets will decide if Apple surpasses Samsung at the full-year level or not,” Chauhan instructed CNBC.