Concerns Over Global Smartphone Market Contraction Amid China Lockdown and War Adversities

Counterpoint Research 2022 Outlook Released
Samsung Foldable Phones Hold the Key to Second Half Rebound

[Asia Economy Reporter Cha Min-young] This year, global smartphone shipments are expected to reach 1.357 billion units, a 3% decrease compared to the previous year. Demand has contracted due to three major adverse factors: China's lockdown orders, the prolonged Ukraine-Russia war, and the U.S. interest rate hike trend.

Counterpoint Research forecasted on the 3rd that the 2022 smartphone market will shrink by 3% year-on-year to 1.357 billion units.

While some components still face unresolved supply shortages, the overall supply situation was expected to gradually improve compared to the previous year. However, the emergence of three major adverse factors in the second quarter has led to changes in the outlook by shrinking the smartphone market.

Counterpoint Research identified the three main adverse factors as ▲China's lockdown orders ▲the prolonged Ukraine-Russia war ▲and the U.S. interest rate hike trend.

Counterpoint Research diagnosed, "Due to China's strict regulations and lockdown policies in response to the recent resurgence of COVID-19, the Chinese market has shown little signs of recovery and continues to stagnate," adding, "This is causing a chain reaction throughout the global economy, including factory closures and rising logistics costs."

They further stated, "The prolonged Ukraine-Russia war has increased global economic uncertainty and inflation, significantly dampening recent consumer sentiment," and "The U.S. interest rate hikes and the strong dollar have also heightened uncertainty in emerging market economies."

Vice President Peter Richardson said, "With steady replacement demand from feature phones to smartphones and ongoing efforts to popularize mid-to-low priced 5G smartphones, the smartphone market is expected to show solid growth in the long term," but added, "However, the recent global inflation trend is suppressing consumer sentiment in the short term and putting pressure on manufacturers' smartphone production costs, which will inevitably act as a hurdle to market growth in 2022."

Senior Researcher Lee Yoon-jung analyzed, "At the end of May, the Chinese government convened a large-scale economic stabilization meeting and is expected to implement more proactive economic policies to stimulate the economy," adding, "We can expect the Chinese economy to recover in the second half of the year after hitting bottom in the second quarter." She continued, "Additionally, new foldable smartphones to be released in the second half, led by Samsung, could stimulate demand in the premium smartphone market," concluding, "The outlook for smartphone market recovery in the second half remains valid."

This content was produced with the assistance of AI translation services.