The International Data Corp. (IDC) predicts a 7.3% year-over-year increase in worldwide smartphone shipments for the fourth quarter of 2023. This growth follows a modest improvement in the third quarter without excess inventory buildup, prompting various channels and major OEMs to boost their business strategies for the upcoming months.
Looking ahead, the smartphone market is expected to continue its recovery in 2024, with an estimated growth of 3.8%. Also, according to IDC, the market will maintain low single-digit growth for the rest of the forecast, resulting in a five-year compound annual growth rate of 1.4%.
Despite the positive outlook for Q4 2023, IDC’s overall forecast for 2023 anticipates a 3.5% decline in worldwide smartphone shipments, totaling 1.16 billion units. This revised forecast indicates an improvement over the previously anticipated decline of 4.7% earlier in the year.
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“The tide has finally turned, signaling that the worst is behind us,” said Nabila Popal, research director at IDC’s Mobility and Consumer Device Trackers.
Chinese market
Popal highlighted the changing sentiment in China, where consumers are increasingly spending on devices, influenced by Huawei’s resurgence. This resurgence is expected to positively impact the broader Android market in the long run. Popal emphasized the maturing market, forecasting a new era of low single-digit growth and extended refresh cycles. Although the total available market will likely remain below pre-pandemic shipment levels, the silver lining is the sustained increase in average selling prices (ASPs) and market value compared to pre-pandemic levels.
The expected rise in Smartphone ASP by 5.5% in 2023 to $438 indicates the fourth consecutive year of growth in the premium market across all regions. However, ASP growth is projected to gradually diminish, reaching $396 by 2027, remaining higher than previous estimates. From the operating systems (OS) perspective, iOS appears more resilient to macro challenges, with a 0.6% growth, achieving a record share of 19.6% this year. On the other hand, Android is expected to decline by 4.4%. Over time, Android is set to grow slightly faster than iOS, reaching an 81.3% market share by the end of the forecast period.
IDC highlighted the ongoing significance of 5G adoption in the smartphone market. Although 5G devices are becoming less relevant in developed markets, their growth in emerging markets is expected to play a crucial role in the market’s rebound next year and beyond. Global 5G shipments are projected to grow by 11% in 2023 and 20% in 2024, with the share of 5G smartphones escalating from 61% in 2023 to 83% by 2027. While smartphones are expected to witness a modest 1.4% CAGR from 2022 to 2027, 5G shipments are anticipated to demonstrate an impressive 11.1% growth rate for the same period.