International Data Corporation's (IDC) Worldwide Quarterly Mobile Phone Tracker report downgraded global shipments of smartphones for the year from an expected 1.6% growth to a decline of 3.5%.
IDC's downshift in growth estimates comes as "the smartphone industry is facing increasing headwinds from many fronts – weakening demand, inflation, continued geopolitical tensions, and ongoing supply chain constraints," IDC research director Nabila Popal said in the report.
The most significant declines are expected in Central and Eastern Europe, with shipments down 22%, and China, the largest smartphone market, is forecasted to decline 11.5% or roughly 38 million units, which accounts for 80% of the global drop in shipment volume this year.
"The 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," IDC research director Phil Solis said. He added: "The bigger problem has been the tight supply of components such as PMICs, display drivers, and discrete Wi-Fi chips."
Last week, sources familiar with Apple's supply chain told Bloomberg that production would remain flat after two months of China's zero COVID policy and resulting lockdowns disrupted suppliers ahead of series production later this summer for the new iPhone.
The expected 3.5% drop in global smartphone shipments to 1.31 billion units is a noticeable decline versus last year and relatively flat growth since 2020. However, smartphone growth is expected to rebound by 5% in 2023 as 5G products are predicted to gain a larger market share.
China's slumping economy and conflict in Ukraine appear to be cooling worldwide smartphone demand this year.