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Smartphone Market Faces Slow Recovery: Foldables Shine Amid Caution

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Weak consumer demand has led analyst firm IDC to revise its outlook for the global smartphone market, anticipating a slower recovery than previously projected. In February, IDC predicted that shipments would fall this year to 1.19 billion from 1.2 billion in 2022; however, based on recent feedback from channels, supply chain partners, and major OEMs, the firm has adjusted its expectations.

Nabila Popal, research director for IDC’s Mobility and Consumer Device Trackers stated, “Consumer demand is recovering much slower than expected in all regions, including China. If 2022 was a year of excess inventory, 2023 is a year of caution.” IDC now forecasts global shipments to total 1.17 billion, equating to a 3.2% decline compared to the 1.1% decline projected previously.

Ryan Reith, group vice president of Mobility and Consumer Device Trackers at IDC, shared that channel inventory remains high in many regions, reflecting a continued lack of confidence from suppliers. While the market is anticipated to make a slow recovery starting next year, shipment volumes are not expected to return to 2021 levels even by 2027.

Recent reports have also indicated a reluctance among consumers to spend on new smartphones, with the average age of traded-in phones increasing and trade-in values rising. This trend suggests that current smartphone models may not provide significant performance improvements over older models, further contributing to longer replacement cycles, higher trade-in values, and lower shipment volume.

Despite a largely pessimistic outlook, foldable phones have been a bright spot in the industry. Foldable phone designs are evolving, and the market for them increased by 75.5% in 2022. However, the high prices of foldables may limit their appeal in the current economic climate. As Reith warned, “We continue to see more foldable designs in the market, which is a great technological step forward for the industry, but the timing is unfortunate given the headwinds.”

As OEMs work to generate excitement with new form factors, more companies are unveiling their foldable devices. Lenovo-owned Motorola recently launched its new range of Razr flip-phones featuring full-length foldable displays, and Samsung is expected to showcase its new Galaxy Z Fold and Z Flip smartphones at an upcoming event. Apple is also rumored to be developing a foldable iPhone, which could debut between this year and 2025. While the emergence of foldables signals innovation within the industry, their impact on the overall market remains uncertain as consumers continue to prioritize affordability and value.

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