Inflation Could Spur Longer Handset Replacement Cycles: TrendForce

Global smartphone production volume was “relatively weak” in Q1, declining 12.8% year on year to 310 million handsets due to ongoing “inventory adjustments” in distribution channels and cyclical off-season patterns, reported TrendForce Wednesday. The resurgence of COVID-19 in China exacerbated the production decline, and war in Ukraine is contributing to rising inflation, said the research firm, predicting lower disposable income will lead to “prolonged replacement cycles” and tighter consumer budgets in the second half. Due to lockdowns in China, its share of the smartphone market has dropped from 24.2% last year to 21.1%, with a 2022 shipment forecast dropping 12.9% to 283 million units. The 2022 U.S. share of smartphones is projected at 11%, behind India’s 13.1% share.