Macroeconomic issues have led International Data Corp. to reduce its smartphone forecast 6.5% to 1.27 billion units shipped this year. The change represents a 3% reduction from initial forecasts.

The factors driving the decline include inflation and geopolitical tensions. IDC expects a quick turnaround, however. The firm says that the category will rebound with 5.2% growth next year and that it projects a five-year compound annual growth rate of 1.4%.

The 5G segment is healthy, with shipments in 2023 expected to grow 23.6% over this year. 5G will account for 54% of all smartphone shipments, with 688 million devices and an average selling price (ASP) of $616. In the longer term, 5G device are expected to represent 79% of device volume and have an ASP of $444 in 2026.

This year, the 4G ASP will hit $176 and drop to $106 in 2026. Overall smartphone ASP will decline from $413 last year to $373 in 2026.

“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” Nabila Popal, the research director for IDC’s Worldwide Mobility and Consumer Device Trackers, said in a press release “High inventory in channels and low demand with no signs of immediate recovery has OEMs panicking and cutting their orders drastically for 2022. The events of the last twelve months have shaved 150 million units off the market for 2022 from our forecast in the second quarter of 2021.”

iOS devices will have 0.5% growth this year and have “minimal growth during the forecast period, with ASPs “well above $950,” according to Anthony Scarsella, the research director with IDC’s Worldwide Mobility and Consumer Device Trackers. He said that Android device shipments will decline almost 8% this year but grow 6.2% in 2023. Lower end (less than $200) Android-based devices have slipped the most, though those about $1,000 have seen sales growth.