Global smartphone shipments to contract in 2022 as China’s Covid-19 lockdowns disrupt manufacturing, logistics

Total smartphone shipments are expected to reach 1.36 billion units this year, down 3 per cent from 1.39 billion in 2021, according to Counterpoint Research

It said China’s zero-Covid-19 measures have slowed its economy, causing a global chain reaction amid the country’s closed factories and rising logistics costs

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Weak consumer sentiment owing to increased global economic uncertainty and surging inflation amid the war in Ukraine are also expected to impact global smartphone shipments this year. Photo: Shutterstock

Published: 5:00pm, 3 Jun 2022Updated: 5:10pm, 3 Jun 2022

Global shipments of smartphones are predicted to shrink by 3 per cent this year amid supply chain disruptions that are partly attributed to China’s faltering economy, which has been slowed by Covid-19 lockdowns, and the war in Ukraine.

Total smartphone shipments are expected to reach 1.36 billion units this year, down from 1.39 billion in 2021, according to the latest global forecast from Counterpoint Research published on Thursday. In contrast, smartphone shipments last year rose 4 per cent from 2020’s 1.33 billion total.

China’s zero-tolerance approach towards a resurgence in Covid-19 infections, which enforced lockdowns on cities and even entire regions, has slowed down economic activity and caused “a chain reaction across the global economy due to the country’s closed factories and rising logistics costs”, the Counterpoint report said. Vast smartphone assembly facilities, such as those run by Apple contract manufacturer Foxconn Technology Group, are located on the mainland.

That assessment reflects continued uncertainty in the smartphone supply chains linked to China even as Beijing moves to ease its rigid Covid-19 control measures.

The entrance to Foxconn Technology Group’s vast manufacturing complex in Zhengzhou, capital of central Henan province. In May, Foxconn had to suspend recruitment of new workers after the city imposed a seven-day lockdown. Photo: Weibo

China’s economy showed some improvement in May as coronavirus cases dropped and restrictions eased, but manufacturing and services activity remained in contraction, with future recovery still vulnerable, according to official data.

The manufacturing purchasing managers’ index (PMI) in May beat expectations and rose to 49.6, up from 47.4 in April, according to the National Bureau of Statistics. A reading above 50 indicates production expansion, while a reading below that mark indicates contraction.