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GfK shares his analysis of the world telecommunication market where they foresee a stabilization of the market for this 2023.
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Results for the year 2022 and prospects for 2023
Latin America, February 21, 2023 – on the eve of Mobile World Congress (MWC) in Barcelona, where the main players in the smartphone and video game industry meet, GfK analyzes the global telecommunications market. While the industry as a whole faced declines in 2022, some categories continued to perform well. By 2023, GfK anticipates a stabilization of the market.
As for all other segments of the Consumer Technology and Durable Goods Market, 2022 was a difficult year for the Telecommunications sector. “Although we had already forecast saturation effects in 2022 after the strong sales of the pandemic years, the additional weakness of the Chinese market significantly affected the results. All in all, the world Telecommunications market closed 2022 with a decrease in revenue of 9.7% compared to the previous year. explains Jan Lobach, GfK expert in the Telecommunications sector.
Smartphones: Decrease in income and change in consumption habits
The smartphone segment, including phablets, also recorded a 9.1% decrease in demand from January to December 2022 compared to the previous year, with a total of 908 million units sold. Revenue was hit even harder, down -10.2% to $330bn.
As budgets became tighter for many, virtually the only market drivers in 2022 were high- and middle-income consumers. These consumer groups increased their share of all smartphone buyers by another 4 percentage points compared to 2021, and now account for 48% of this group. Consequently, the demand for premium devices also increased, with, for example, the revenue of 5G models growing by 1.2% from January to December 2022 compared to the previous year. The same goes for devices with higher storage. Smartphones with a capacity greater than 256 GB registered an increase of 19% and accounted for 41% of the total market revenue in 2022.
Although consumers who continue to buy smartphones are opting for high-end devices, the total number of purchases has decreased in 2022. One reason may be that people keep their smartphones for longer. Data from gfknewron Consumer shows that from January to September 2018, only 48% of consumers used their smartphones for two years or more. That proportion has now increased to 57% in the same period of 2022 (an increase of plus 11 percentage points). This evolution is especially observed within Generation Z (15 to 25 years old), where the share is now 14 percentage points above the average. The younger generation has a clear orientation towards sustainability and therefore consciously extends the life cycle of their devices.
Wearable Accessories: Stay Stable Thanks to Sensor Innovations
One of the few segments that has managed to stably survive the difficult year 2022 is that of portable accessories. With 13.9 billion dollars in revenue, the wearables market reached almost the same level in 2022 as the previous year (minus 1.1% compared to 2021). Although the most popular segments have lost ground, this has been offset by growth in other product lines.
Evolution of revenue by wearables category in 2022 compared to the previous year:
| • Health & Fitness Tracker: -31%• Smart Watches: +21%• Sprot Wrist Computers: -43% |
These changes have been driven by growing consumer demand for more granular control of their health through smart features. Thus, wearable accessories with a sleep monitoring function (more than 4%) or blood oxygen sensors (more than 20%) registered strong growth. This trend has also led to breakthroughs in innovation, such as the new Stress Level Measurement (EDA) feature. Launched in the fourth quarter of 2021, these devices already represent 16% of revenue in the wearables market and continue to grow.
VR/VR Headset: First Drop Ever, But Potential Still High
Other hot topics at MWC are virtual reality (VR), augmented reality (AR) and the metaverse. Experiencing this is possible thanks to devices such as virtual reality headsets. As awareness and discussions around the metaverse grow, VR headset dealer sales in the European market* declined 15% year-on-year in 2022. This is the first decline ever, as the market has previously recorded a double digit growth for years.
‘The European market appears to have achieved initial consumer penetration. The industry must now focus on offering more content, as well as better visual quality and security, to drive the market from this initial penetration. Convincing consumers about use cases will be key to driving the VR/metaverse forward.” says Sohjing Baek, GfK expert for global IT hardware industry.
Outlook 2023
GfK experts forecast a stronger year 2023 for the global telecom market compared to the relatively weak 2022. Regionally, China, which is the largest single market, is expected to recover and significantly drive market growth. world. Additionally, the evolution of the three main product categories will have a positive impact:
- Although replacement cycles are expanding, smartphone purchases made at the height of the pandemic, in 2020 and 2021, are entering the expected renewal cycle window this year.
- In accessories, the next generation of health monitoring sensors, which will broaden the scope of applications, will drive the market forward. In addition, positive revenue growth is expected in the smartwatch segment.
- It is expected that the VR/RA become more tangible and grow in fields that go beyond video games. It is one of the segments with the greatest potential for the coming years.
To remain competitive in the marketplace and differentiate themselves from their competitors in terms of quality, retailers and manufacturers must continue to innovate for more powerful or faster devices that make life easier for consumers. “Innovation will further drive consumer demand. Especially at a time when smartphone retention times are lengthening and budgets are tight, consumers will be asking for value for money more than ever.” summarizes Jan Lorbach, GfK’s expert in the telecommunications market.
About the method
Through their retail panels, GfK regularly collects point-of-sale data in more than 70 countries around the world for the consumer electronics, photography, telecommunications, information technology, office equipment, and small and large appliance sectors. All figures are for the GfK panel market, with global data excluding North America and presented in US dollars. Revenues are presented in US dollars Non-subsidized prices (PNS).
gfknewron is a permanent platform that combines market, consumer and brand data with AI-based recommendations. It empowers businesses to gain actionable, connected insights and act quickly to drive sustainable growth. The platform offers three specific modules: “gfknewron Market” to obtain information about the market and the competition, “gfknewron Consumer” to know the consumer in depth and “gfknewron Predict”, which offers recommendations to companies based on market data and intelligence. artificial.
* Data for European markets include Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Russia, Spain, Sweden and the United Kingdom.
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Source: Press Release.
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