The smartphone market is entering its worst year in a decade

The global smartphone market is entering its worst year in more than a decade as lingering economic uncertainties in China hit consumer spending.

According to the latest estimates by Counterpoint Research, the number of smartphones is expected to decline by 6% year-on-year, to 1.15 billion handsets by 2023, as the Chinese economy is growing in the direction of worsened, struggling with deflation and a sharp drop in demand in the US.

“Asia is one of the major barriers to positive growth, as adverse conditions hinder the expected economic turn for China,” the report said. In North America, “consumers are hesitant to upgrade their devices, pushing replacement rates in the United States and globally to record lows.”

However, Apple Inc. considered eligible to weather the downturn, as its iPhones are set for a substantial upgrade cycle in the second half of the year. While Chinese brands like Xiaomi Corp. and Oppo has to compete for customers with every new device, Apple already has hundreds of millions of upgrade-ready users in its hardware ecosystem.

“To date, all vendors have recorded a record low number of device upgrades,” said Jeff Fieldhack, research director at Counterpoint North America. The launch of the iPhone 15 is an opportunity for Apple to win over high-end customers. And with that strong base, promotions will be very aggressive, helping Apple have a good position in the market.

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