iPhone Smartphone

Shipments of smartphones are expected to decline 3.5% to 1.31 billion units this year, according to the latest International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker forecast.

Shipments have declined for three consecutive quarters, and supply chain challenges and a decline in consumer demand prompted IDC to revise its earlier 2022 forecast. The earlier forecast called for a 1.6% increase in shipments for the year, said the research firm. IDC also lowered its 2021 smartphone shipments forecast near the end of last year.

This year’s decline is expected to be a short-term blip in the trend of increasing smartphone shipments, which IDC expects to achieve a five-year compound annual growth rate (CAGR) of 1.9% through 2026.

And despite the expected decline in overall shipments, IDC forecasts that 5G devices will grow 25.5% year over year in 2022, accounting for 53% of new shipments. Nearly 700 million 5G devices are expected to be shipped, with an average selling price of $608.

The total forecast shipments, while up significantly from 2021, will still be down from earlier forecasts, according to IDC, which blamed increased channel inventory of 5G products in China. The firm added that 5G is expected to reach a volume share of 78% in 2026 with an average sales price of $440.

“The ongoing semiconductor supply issues will ease up in the second half of 2022. On the SoC side, 4G SoC supply has been tight, but the market continues to shift towards 5G SoCs,” said Phil Solis, IDC research director in the company’s enabling technologies and semiconductors team, in a prepared statement. “The bigger problem has been the tight supply of components such as PMICs, display drivers, and discrete Wi-Fi chips. Capacity is being increased for these semiconductors that are made in higher process nodes and newer versions of Wi-Fi chips are being made with newer process nodes. At the same time, demand is dropping. Combined, these supply and demand changes will put the market more in equilibrium.”

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