According to research group IDC shipments of smartphones will decline 3.2% in 2023, totalling 1.17 billion units for the year.

The latest downward revision from IDC is a 1.1% decline from what they forecast in February.

The revision is being driven by several factors, including a weaker economic outlook and ongoing inflation.

According to Terry Smart the CEO of JB Hi Fi “The market for affordable premium or mid-range phones is growing because the quality of the devices are better and deliver value”.

The other market that’s still strong is premium because the smartphone has become a key part of our lives”. He told ChannelNews.

Despite the lower forecast for 2023, IDC still expects a market recovery in 2024 with 6.0% year-over-year growth.

“Our conversations with channels, supply chain partners, and major OEMs all point to recovery being pushed further out and a weaker second half of the year,” said Nabila Popal research director with IDC’s Mobility and Consumer Device Trackers.

“Consumer demand is recovering much slower than expected in all regions.

If 2022 was a year of excess inventory, 2023 is a year of caution with many retailers only placing orders for replacement stock in Australia.

While everyone wants to have inventory ready to ride the wave of the inevitable recovery, no one wants to be stuck holding it too long. This also means the brands that take the risk – at the right time – can potentially reap great rewards of share gain “claims Ryan Reith, group vice president, Mobility and Consumer Device Trackers at IDC.

“Channel inventory remains elevated in many regions and while things have improved, the confidence from suppliers is still low,” said Ryan Reith, group vice president, Mobility and Consumer Device Trackers at IDC.

“We continue to see more foldable designs in the market, which is a great technological step forward for the industry, but the timing is unfortunate given the headwinds. As many companies continue to focus on reducing budgets the aftermath of those decisions can be long. Now is a time to invest in customers and what they need and want. Marketing support, sales incentives, and promotional support should be at the top of that list.”

See separate story on second hand smartphone market.