Weak consumer demand, according to a new forecast by the International Data Corporation (IDC) continues to delay the recovery of the smartphone market. Global cell phone shipments expected to fall by 3.2% in 2023 to 1.17 billion units per year.downward revision from a 1.1% decline forecast in February.

Factors behind this downward revision include a weaker economic outlook and continued inflation. However, IDC still expects the market to recover in 2024., with an annual growth of 6.0%. Conversations with channels, supply chain partners and large OEMs show that the recovery is being pushed into the future and that the second half of the year will be weaker.

“Consumer demand is recovering much slower than expected in all regions, including China,” said Nabila Popal, director of research at IDC. “If 2022 was the year of overstocking, then 2023 is the year of caution. While everyone wants to have stock ready for the inevitable wave of recovery, no one wants to dwell on it for too long.”

Companies may know how to use this moment to their advantage.

This cautious environment means that brands that take risks – at the right time – can potentially reap huge returns on share gains. Despite improvements, channel inventories remain high in many regions and supplier confidence remains low.

“We continue to see more folding structures in the market, which is a huge technological breakthrough for the industry, but the timing is unfortunate given the headwind,” said Ryan Reith, IDC group vice president. “Now is the time to invest in customers and what they need and want. Marketing support, sales promotion and advertising support should be at the top of the list”?

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Source: IDK.

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