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SHANGHAI: Global smartphone shipments are headed for their worst year for over a decade as prolonged economic uncertainties in China and beyond are hurting consumer spending.

Shipments are expected to drop 6% year-over-year to 1.15 billion handsets in 2023, according to the latest Counterpoint Research estimate, due to a deteriorating Chinese economy struggling with deflation and disappointing demand in the US.

"Asia is one of the major hurdles to positive growth, as headwinds halt the economic turnaround anticipated for China,” the report said. In North America, “consumers are hesitant to upgrade their devices, pushing replacement rates for the US and globally to record highs”.

Apple Inc is seen as relatively well-placed to weather the downturn, however, as its iPhone is set for a significant upgrade cycle in the latter half of the year.

While Chinese brands like Xiaomi Corp and Oppo have to compete for customers with every new device, Apple benefits from hundreds of millions of users who will only upgrade within its hardware ecosystem.

“So far this year it’s been record low upgrades across all carriers,” said Jeff Fieldhack, Counterpoint research director for North America.

“The iPhone 15 launch is a window for carriers to steal high-value customers. And with that big iPhone 12 installed base up for grabs promos are going to be aggressive, leaving Apple in a good spot.”