The global crisis has severely impacted the smartphone sector, in particular IDC expects a drop in sales of 6.5%, i.e. 1.27 billion units
The global dynamics that have manifested themselves in the last three years have contributed significantly to alter some markets.
The prices of many common goods have risen to the point of making them luxury goods and others have become practically unobtainable. In particular, the outbreak of the war in Ukraine, the Covid-19 pandemic and the semiconductor crisis have had a particularly significant impact.
The smartphone market does not seem to have escaped these events. IDC, a US technology research firm, in its latest report "Worldwide Quarterly Mobile Phone Tracker" estimated that the smartphone market will experience a decline in sales in 2022 of 6.5%, ie for 1.27 billion of units.
Despite the crisis, the price of smartphone sales in the second quarter of the year even increased by 10%, reaching what analysts consider to be the peak. Using a conservative estimate, they stated that the rise in the price of smartphones should be around 6% at the end of the year.
The reasons why this happens are many: the semiconductor crisis first of all forced many companies in the recent past to have to slow down or even temporarily stop production, due to the lack of these important components made for most of them in Asia.
Secondly, another important factor to take into consideration is inflation: with the increase of the cost of living and of the goods on the market it has become increasingly difficult to access goods also of (almost) basic necessities, as are smartphone today.
In fact, it is not difficult to find devices that cost more than 1,000 euro, a figure similar to the salary of many people in many European countries. The costs of international transport and the underlying geopolitical tensions are helping to turn this situation into a "perfect storm" for retailers and smartphone manufacturers.
However, the American company said that this difficult moment should have short life: already in 2023 we should see an increase in sales of 5.2% and a growth rate of ’1,4% over a horizon of five years.
The premium smartphone segment, that is, with a cost of more than $800, has withstood the international turmoil well, in fact they recorded an increase in sales of 4%, reaching 16% overall market.
From a geographic point of view, it is the emerging markets that have been most affected, particularly those where smartphones are sold for less than $400. IDC expects Central and Eastern Europe to witness a decline in sales of 17.4% in 2022 and Asia-Pacific (excluding Japan and China), previously expected to grow by 3.0%, should now go down by 4.5% in 2022.
However, the most significant decline in volume comes from China, which is now expected to decline by 12.5%, or approximately 41 million units, contributing to nearly the half of this year’s overall reduction. Conversely, developed markets such as North America (USA and Canada) and Western Europe are expected to do much better in 2022.
The United States growth forecast for 2022 is 0.3%, while the Canadian market will do slightly better with 3.2% growth and only a slight decline of 0.7% for Western Europe.
Hard times for Huawei
Given this situation, many companies are going through complex moments that force them to face numerous difficulties, one of these is Huawei which, a few days ago, internally released a note that had to be confidential, except then it spread and became public.
Within the memo, company Ceo Ren Zhengfei talks about hard times and the need to face a seriously complex moment: currently in China millions of people are still in lockdown, there are 41 cities currently where it is not possible to go out due to the controversial zero-Covid policy imposed by the Xi Jinping government; not only that: the tensions with the United States and the conflict between Russia and Ukraine certainly do not make the situation easier.
Already last year the company had been forced to reduce the workforce by 2,000 units due to the crisis. This year the situation does not seem to improve, the company has in fact had a decline in net profit of 6% in the first half.
According to the manager’s forecasts, it will be necessary to adopt a "survival mode" at least until 2023 and, possibly, if the situation does not improve, even until 2025, an estimate that corresponds to that achieved from IDC.
Original article published on Money.it Italy 2022-09-01 11:57:40.
Original title: Quest’anno si venderanno meno smartphone, ecco perché
