According to a report, the US smartphone market will settle into a flat growth path with a modest 2% increase in smartphone demand. Because inflationary pressures are expected to reduce demand in the coming quarters, the latest forecast has been revised downward from the previous estimate of 6% YoY growth in 2022.
According to Counterpoint Research, the smartphone market in the United States is expected to grow by 2% this year. According to Counterpoint, its forecast for 2022 has been significantly reduced from its previous projection of 6% growth because demand will be suppressed in the remaining quarters due to inflationary pressures. However, several industry events scheduled for 2022 are expected to boost low-end smartphone sales. Carriers will be forced to migrate subscribers to new LTE and 5G devices as 3G networks become obsolete.
“We began the year with strong sell-in momentum, with Q1 2022 seeing 6% YoY growth due to solid postpaid demand. However, we are adjusting our shipment forecast numbers downwards as we are increasingly seeing the impact of inflation in the US market,” said Research Director Jeff Fieldhack. “Last year, we saw supply as a much bigger issue as chipset shortages impacted smartphone manufacturing”, Fieldhack added.
The flat growth is attributed to demand issues. Americans’ purchasing habits have shifted away from technology products to experiences such as vacations and outings. Furthermore, as fuel prices rise owing to inflation, people are making fewer excursions to retailers and altering their spending behavior even more, says the report.
"Weak demand will have the greatest impact on prepaid sales, as this is the most price-sensitive segment in the United States," said Senior Research Analyst Maurice Klaehne. "This is also where consumers will feel the brunt of any device price increases." National retailers are feeling the effects of inflation, but the results are mixed. Walmart, which is a one-stop shop for groceries, electronics, and more, may be less affected than Best-Buy, which is a highly specialised tech retailer," Klaehne added.
