China's slowing economy and an inflation-driven drop in consumer spending are expected to drag down global shipments of computers and smartphones this year, according to research firm Gartner.
Shipments to China - the world's biggest smartphone market - are expected to shrink by 18 percent as demand takes a beating from strict COVID-19 curbs that halted activity in key economic hubs including Shanghai, Gartner said in a report on Thursday.
The research firm expects a 7 percent drop in worldwide smartphone shipments, also reflecting the expected toll of supply chain snarls and the Russia-Ukraine conflict on demand.
"A perfect storm of geopolitics upheaval, high inflation, currency fluctuations and supply chain disruptions have lowered business and consumer demand for devices across the world, and is set to impact the PC market the hardest in 2022," said Ranjit Atwal, senior director analyst at Gartner.
Gartner expects global computer shipments to drop 9.5 percent this year.
The forecast mirrors commentary from industry players, with chipmaker Advanced Micro Devices Inc saying earlier this month that the PC market was set for a slowdown after two "very strong" years.
The soft demand for PCs and smartphones is likely to weigh on companies from chipmakers such as Nvidia Corp to mega-cap tech firms including Apple Inc and Microsoft Corp. Those companies are set to report second-quarter earnings starting next month.
Earlier this month, a report by IDC Worldwide Quarterly Mobile Phone Tracker projected that g lobal smartphone shipments are expected to take a hit and decline 3.5 percent to 1.31 billion units in 2022. The decline has been attributed to “increasing challenges in both supply and demand.”
As a result, original equipment manufacturers, including Apple and Samsung, have cut back orders for this year. However, the market research firm claims that Apple seems to be the least impacted vendor. The 5G devices are also expected to grow 25.5 percent year-over-year (YoY) in 2022, according to the report.
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