While there are some hopes for hardware sellers, market analysts Context sees only doom for the mobile market
Context analysis of the second quarter indicates that the market has remained on a downward trajectory.
There are two possible scenarios for how the quarter will have gone, with the most optimistic expecting a 23.3 per cent year-on-year decline in the market. The most miserable prediction is for a 32.5 per cent decline. This follows a 21.6 per cent drop in units sold in the first quarter.
Context global managing director Adam Simon said that the gloomiest figure was a belief that the economy will get worse, but the more positive outlook assumes greater sell-out of excess stock.
“It also takes into account stimulation programmes designed to remedy the supply problems we saw in mid-2022, and assumes these will be successful. “High inflation will continue to impact business spending in the second quarter, especially that of SMEs, which have to manage their cash flow more carefully.”
He said most organisations will delay purchases, and where there is spending, it is unlikely to be on devices. Increases in the cost of living will continue to affect consumers, and there is a certain amount of saturation in this market due to purchases made during the pandemic.
The sense of a better outlook is one where an optimistic view is when the year-on-year declines are reduced in the third quarter and then mobile computing sales will grow by 5.8 per cent and an even higher level in the first quarter of 2024.
The industry is suffering slightly from comparisons with a pandemic period where hardware sales were inflated as a result of the scramble by users to get the devices needed to work from home.
Although unit sales have declined in 2023 so far, revenues are holding up because average sale prices have also been increasing during the period. The channel is also benefiting from demand shifting to higher-value products, Simon said.
“Activities designed to drive out low-end stock will be more than offset by higher demand and prices for mid-range and high-end products – something that has been happening since the start of the pandemic, added Simon. “So, although the current picture is rather gloomy, there are reasons to be optimistic,” he said.
Earlier this year, Context voiced expectations that a similar improvement in market conditions would happen for the desktop PC segment, highlighting the role that Windows 11 could play in driving fresh investments.
