Ukraine war, chip shortage, weak global economy all point to a 3% decline in 2022 phone shipments

by techlowdown · 3 June 2022

The bean counters at analytical firm Counterpoint Research have looked at the numbers, examined the trends, and have come to the conclusion that the total number of smartphone units shipped globally in 2022 will reach 1.36 billion units this year. That would represent a 3% decline from the number of smartphones that were delivered last year.

The main reasons for the decline in smartphone shipments forecast this year include the weaker global economy led by a recession helped along by the return of COVID in China, and the uncertainty surrounding the Russian-Ukraine battle. If there’s one thing that global markets hate it is uncertainty and at this point, no one can come up with any kind of prediction that includes a likely scenario on how the war is going to end.

We also can’t forget the global chip shortage which is making it difficult for some manufacturers to obtain the quantity of some chipsets that are badly needed to build some popular smartphone models. Ironically, older chips are the ones that phone makers are finding it hard to find.

Counterpoint forecasts smartphone shipments to decline by 3% this year.

Counterpoint Research Vice President Pete Richardson said that the long-term migration by consumers from feature phones to smartphones continues while at the same time the public is still in the early stages of the 3G/4G to 5G transformation. Low-priced and mid-priced 5G handsets are expected to help drive overall global demand for smartphones. With carriers promoting 5G plans and handsets, many consumers are buying their first 5G phones even if they are usually connecting with low-band 5G signals that aren’t delivering download data speeds much faster than those found on 4G LTE networks.

Perhaps a wee bit optimistic for the second half of the year is Counterpoint Network’s Senior analyst Liz Lee. She says “However, the outlook for a smartphone market recovery in the second half still stands. At the end of May, the Chinese government convened a meeting for large-scale economic stability countermeasures. The government is expected to implement more aggressive policies to stimulate the economy in the second half. Besides, we believe that new foldable smartphone launches, led by Samsung, will be able to stimulate demand in the premium segment.”

Liz is calling for a second-half rebound in China and good demand for foldables to jumpstart the global smartphone market in the second half of the year.