LatAm smartphone market expected to bounce back in H2 – Qualcomm

US chipmaker Qualcomm sees the sale of smartphones, at least certain devices, bouncing back in Latin America in H2 after several quarters of weak sales, the company's LatAm president Luiz Tonisi told BNamericas.

The trend is in line with the gradual, albeit fragile, recovery of the region’s economies and a greater interest in more advanced devices, he said.

“With higher interest rates, persistent inflation, the purchasing power for the acquisition of durable goods gets affected. There has been a decline, but we already see some positive signs of stabilization and, in some segments, a small improvement, which we expect especially for the second half,” said Tonisi.

Qualcomm supplies the Snapdragon family of semiprocessors, which powers devices manufactured by smartphone brands Samsung and Motorola, among others.

Leveraging the sale of 5G-enabled smartphones, which in general are high-end devices, is crucial for mobile operators to be able to accelerate investments in expanding 5G networks beyond the bigger urban centers and, ultimately, sell plans and services related to this technology.

But the smartphone market in Latin America in general has shrunk in terms of number of devices sold. This is due to economics, but also the end of the tendency for users to have more than one device, among other factors.

“Desktops, notebooks, tablets, feature phones, smartphones, printers, multifunctionals, monitors and wearables faced several critical moments in 2022 and this device market will continue with a challenging dynamic in 2023,” Reinaldo Sakis, head of consumer devices at IDC Latin America, said in a February report.

In Brazil, 6.93% fewer handsets were sold in 2022 compared to 2021, according to IDC.

Last year, 42.6mn devices were sold in the country, of which 40.6mn were smartphones and 1.92mn feature phones, with year-over-year drops of 6.31% and 18.3%, respectively, said the research firm.

In Mexico, the smartphone market saw a 9.0% drop in number of devices sold in 2022 to 28.9mn but a 22% increase in value due to the sale of more advanced phones, according to IDC.

IDC projects 29.2mn smartphone sales in Mexico in 2023. For Brazil, the expectation is for single-digit growth in units sold.

“The Brazilian market used to be a market that sold 60mn phones per year in the past. It's a market that has already dropped some 20% if you take historical data from the peak of consumption. On the other hand, the average value of smartphones sold has risen. That is, users who buy are buying more high-end cell phones,” according to Tonisi.

Sales of smartphones priced at above US$400 have seen an increase both in units and overall value, according to the executive. Meanwhile, sales of mid-tier devices have experienced a modest drop and those of entry-levels fell the most.