The global telecommunications market experienced a 9.7% revenue decline in 2022 compared to the prior year, according to new GfK data released ahead of the Mobile World Congress (MWC) in Barcelona from 27 February 2023.

GfK forecasts a stabilisation of the market this year, following saturation in 2022, coupled with a weak Chinese market.

The smartphone segment, including phablets, saw a 9.1% decline from January to December 2022 compared to the previous year, with a total of 908 million units sold. Revenues were hit even harder with a 10.2% drop to US$330 billion (A$480 billion).

In 2022, the only market drivers were consumers with higher and middle incomes who increased their share of all smartphone buyers by a further 4% compared to 2021, and now account for 48% of this group.

Accordingly, demand for premium devices also increased, with, for example, revenue of 5G models growing by 1.2% from January to December 2022 compared to the previous year. The same applies to devices with larger storage. Smartphones with a capacity of more than 256GB recorded an increase of 19% and accounted for 41% of total market revenue in 2022.

While consumers that are still buying smartphones are opting for premium devices, the total number of purchases decreased in 2022 as people choose to keep their smartphones for a longer time.

Data from gfknewron Consumer shows that from January to September 2019, 48% of consumers used their smartphones for two years and longer. That share has now increased to 57% in the same period of 2022, particularly within Generation Z (15 to 25 years old) with a share that’s 14% above the average.

Wearables still stable  

With US$13.9 billion in revenue, the wearables market achieved almost the same level in 2022 as in the previous year with just a small 1.1% decline. Although popular segments have lost ground, this has been offset by growth in other product lines. Wrist sports computers experienced a 43% drop, while health and fitness trackers saw a 31% drop. This compared to a 21% increase for smartwatches.

These shifts have been driven by increasing consumer demand for more detailed control of their health, via smart features. Accordingly, wearables with a sleep tracking feature or blood oxygen sensors showed strong growth.

AR/VR headsets see first decline ever

Experiencing augmented reality (AR), virtual reality (VR) and the metaverse are made possible by devices such as VR headsets. While awareness and discussions around the metaverse rise, retail sales of VR headsets in the European market declined by 15% year-over-year in 2022. This is the first decline ever, as the market has previously recorded double-digit growth for years.

The European market seems to have accomplished initial consumer penetration, according to GfK expert for global IT hardware industry, Sohjin Baek. “The industry should now focus on providing more content, as well as better visual quality and security, to drive the market based on this initial penetration. Convincing consumers about the use cases will be key to drive VR/metaverse forward.”