NEW DELHI: The global smartphone shipment is expected to fall by 3% Year-on-Year to 1.36 billion units due to the resurgence of Covid-19 in China and ongoing war between Russia and Ukraine.
According to Counterpoint Research's latest global smartphone quarterly shipment forecast, the situation is expected to gradually improve in 2022 when compared to the previous year, although shortages of several parts have not been resolved yet.
"On the macroeconomic front, expectations for recovery are now falling sharply and more concerns are spreading centered on China's prolonged recession and the Ukraine crisis. Therefore, we expect this year's smartphone market to contract," reads the report.
The resurgence of Covid-19 in China has forced several major cities or entire regions to go into lockdowns. The prolonged lockdown has been slowing down its economy, besides causing a chain reaction across the global economy due to the country's closed factories and rising logistics costs.
The ongoing war between Ukraine and Russia has also led to a surge in inflation.
"For the long term, we continue to expect a steady migration from feature phones to smartphones and 3G/4G to 5G smartphones. As efforts to spread low- and mid-priced 5G devices continue, the global market for 5G devices is expected to show healthy growth and act as a significant driver of the overall smartphone market. However, the recent global inflation trends are hitting consumer demand and smartphone BoM costs, acting as a risk for the 2022 smartphone market," said Peter Richardson, Vice President at Counterpoint Research.
Senior analyst at Counterpoint Research Liz Lee however believes the outlook for a recovery of the smartphone market in the second half still stands.
At the end of May, the Chinese government convened a meeting for large-scale economic stability countermeasures.