Electronics

According to Watson & Band data, smartphone shipments in 2022 will drop by 6.5% to 1.27 billion units. The decline was due to record inflation, geopolitical tensions and other macroeconomic challenges that have significantly dampened consumer demand. The forecast figure is down 3 percentage points from the previous forecast. However, IDC expects the setback to be short-term, with the market rebounding to 5.2% year-over-year growth in 2023 and a five-year compound annual growth rate (CAGR) of 1.4% in the longer term.

However, despite the decline in sales, the average selling price (ASP) rose 10% year over year in the second quarter and is expected to rise 6.3% for the full year, analysts said. The premium segment (above $800) proved resilient to economic turmoil, increasing its share by 4 percentage points to 16% and continuing to grow. That includes foldables, the fastest-growing segment right now and is expected to grow 70% year-over-year by 2022, with shipments reaching 13.5 million units.

Watson & Band import and export data show that from a regional perspective, the economic crisis has had a severe impact on emerging markets. The bulk of shipments in emerging markets came from devices priced below $400, and the impact was even more severe. Watson & Band data show that in 2022, Central and Eastern Europe is expected to decline by 17.4%, Asia Pacific (excluding Japan and China) is expected to grow by 3.0%, and is now expected to decline by 4.5% in 2022. The most dramatic drop in sales, however, is in China, where a 12.5% drop is now expected, to about 41 million units, accounting for nearly half of this year's total drop in sales. In contrast, developed markets such as North America (US and Canada) and Western Europe are expected to perform much better. The U.S. market was relatively flat, up 0.3% year-on-year, while the Canadian market grew 3.2% year-on-year, and Western Europe fell only slightly by 0.7%.

In addition, Watson & Band data shows that in 2022, global 5G equipment shipments will increase by 23.6% year-on-year, accounting for more than half (54%) of global shipments, and will reach 688 million units, with an ASP of US$616. Watson & Band data shows that in the long run, the sales share of 5G equipment is expected to reach 79% by 2026, with an ASP of US$444. In comparison, 4G equipment ASP will reach $176 in 2022 and drop to $106 by the end of the forecast period. As a result, overall smartphone ASP will drop from $413 in 2022 to $373 in 2026.