Next year could provide a much-needed reprieve for smartphone makers as the market recovers and consumers start snapping up new high-end models in 2024, claims a new forecast published by market analysts Canalys.
The company said it expects the smartphone market to decline 13% this year, mainly due to economic uncertainty, longer device lifespans and purchasing cycles. The growing strength of the used smartphone market doesn’t help either.
However, next year the number of smartphones sold in Europe (excluding Russia) should increase by 7%, reaching 132 million devices by 2024. Growth will be fueled by a number of factors, including a new renewal cycle and easing of economic pressures.
Seeds of optimism
For Runar Bjørhovde, analyst at Canalys, falling inflation and improving inventory levels have “sowed the seeds of optimism.” The decline in demand is stabilizing, while channel inventory levels continue to improve, he added. Therefore, market growth should return in 2024, especially in Central and Eastern Europe, Italy, Spain and Portugal.
Bjørhovde also emphasized that although the higher end of the market is saturated by brands like Apple and Samsung, there is plenty of room in the lower end among cheap phones. Samsung, like a number of other vendors, has deprioritized the sub-$200 price range, largely due to difficulties in staying profitable.
“There is demand in this segment across the region, but there is only room for two or three successful suppliers as the segment requires economies of scale and close collaboration with the channel to succeed,” he concluded.
While the medium-term outlook appears promising, long-term analysts still expect market growth to continue to slow. For example, in 2027, market growth will recover to 2022 levels, with growth of only 2%. “Ultimately, suppliers that show resilience in the current market environment and have the ability to quickly adapt to new regulations will prove themselves as strong long-term partners of the channel,” Bjørhovde concluded.