Weaker demand and global uncertainty are hampering the growth of global smartphone shipments, leading to a significantly reduced forecast for 2022 from the previous projection of 1.6% growth.

The International Data Corporation (IDC) now expects shipments of smartphones to decline 3.5% to 1.31-billion units in 2022, after three consecutive quarters of decline and increasing challenges in both supply and demand.

However, the decline is likely to be a short-term setback as the market rebounds to achieve a five-year compound annual growth rate of 1.9% to 2026, according to the IDC’s Worldwide Quarterly Mobile Phone Tracker.

“The smartphone industry is facing increasing headwinds from many fronts – weakening demand, inflation, continued geopolitical tensions and ongoing supply chain constraints. However, the impact of the China lockdowns, which have no clear end in sight, are far greater,” says IDC worldwide mobility and consumer device trackers research director Nabila Popal.

The Covid-19-linked 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, she explains, noting that many original-equipment manufacturers cut back orders for this year.

“However, Apple appears to be the least impacted vendor, owing 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 such as inflation.”

The challenges are expected to ease by the end of the year, barring any new setbacks, with the market expected to recover in 2023, registering 5% growth.

“The ongoing semiconductor supply issues will ease up in the second half of 2022. On the system-on-a-chip (SoC) side, fourth-generation (4G) SoC supply has been tight, but the market continues to shift towards fifth-generation (5G) SoCs,” adds IDC enabling technologies and semiconductors research director Phil Solis.

“The bigger problem has been the tight supply of components such as power management integrated circuits, display drivers and discrete WiFi chips. Capacity is being increased for these semiconductors that are made in higher process nodes and newer versions of WiFi chips are being made with newer process nodes. At the same time, demand is dropping. Combined, these supply and demand changes will put the market more in equilibrium.”

The largest decline during 2022 is expected from Central and Eastern Europe with shipments falling 22%, while China is forecast to record a 11.5% decline, or 38-million units, which is about 80% of the global reduction in shipment volume this year.

Mobile shipments in Western Europe are expected to decline 1%.

Many other regions, however, will see positive growth in 2022, including AsiaPacific (excluding Japan and China), which is expected to deliver 3% growth.