Next year could provide the much-needed respite for smartphone manufacturers, as the market rebounds and consumers start picking up new high-end models in 2024, a new forecast published by market analysts Canalys has claimed.
The firm said it expects the smartphone market to fall by 13% this year, mostly due to economic uncertainty, extended device lifetimes, and purchasing cycles. The used smartphone market’s growing strength isn’t helping here, either.
Next year, however, smartphone shipments should rise by 7% in Europe (excluding Russia), hitting 132 million devices in 2024. The growth will be fueled by a couple of factors, including a new refresh cycle, and easing economic pressures.
Seeds of optimism
For Runar Bjørhovde, an analyst at Canalys, falling inflation and improving inventory levels have “sown the seeds of optimism.” The decline in demand is stabilizing, while channel inventory levels keep improving, he added. Hence, market growth should return in 2024, mostly in Central and Eastern Europe, Italy, Spain, and Portugal.
Bjørhovde also stressed that while the high-end part of the market is saturated by the likes of Apple and Samsung, there’s plenty of room in the low-end segment among cheap phones. Samsung, as well as a couple of other vendors, have deprioritized the sub-$200 price band, mostly due to problems staying profitable.
“There is demand in this segment across the region, but there is only space for two or three successful vendors as the segment requires economies of scale and close collaboration with the channel to succeed,” he concluded.
While the mid-term outlook looks promising, in the long-term the analysts still expect the market growth to continue slowing down. In 2027, for example, market growth will recover to 2022 levels, growing just 2%. “Ultimately, vendors that show resilience in the current market environment and an ability to quickly adapt to new regulations will prove themselves as strong long-term partners to the channel,” concluded Bjørhovde.