Top 10 Macro Risks For Tech World in 2023

  • Counterpoint analysts say economic recession will be the biggest macro risk affecting the tech world in 2023.
  • Economic recession is followed by the ‘US vs China rivalry’ and ‘energy crisis’ risks.
  • There is a sense that the tech industry is at the whim of factors it cannot control, as most of the issues do not relate to tech itself.
  • China-related issues feature prominently on the ranking, appearing three times.

 London, Boston, Toronto, New Delhi, Hong Kong, Beijing, Taipei, Seoul – January 24, 2023

Counterpoint Research has released its latest list and analyses of the top 10 macro risks that are most likely to impact the tech industry in 2023. In the list, which is a result of a survey conducted among Counterpoint analysts, the potential of economic recession ranks as the highest, by a large margin, followed by ongoing US and China tensions, and the energy crisis, which mainly stemmed from the Russia-Ukraine war.

Average Score of Top 10 Risks Rated by Counterpoint Analysts

average score of top 10 risks rated by counterpoint analysts

The risk of economic recession continues to impact almost all industries, and tech has not been spared, despite the post-pandemic boom. The concerns about recession driving other macro risks resonate throughout our analysts’ primary concerns, such as in expected emerging markets’ pain, tech earnings retreat, and China’s recovery path. As we wrap up the report, there is a sense that the worst of the economic headwinds in the developed world may have passed, but there are still question marks over how much of the damage has already been inflicted, or how fast the economic rebound will be in the coming year.

In 2022, we also saw an escalation of tensions in the United States vs China rivalry. Most prominently, sanctions by US authorities against China’s fledging semiconductor industry are likely to hold back growth in this strategically important sector, with deep and long-lasting ramifications in China and beyond. Elsewhere, the two countries still hold many grudges, the most significant being the status of Taiwan, stance over the war in Ukraine, and trade tensions. Any of these have the potential to plunge the countries into deeper conflicts, but from our point of view, the fragmentation of the global system into potentially ‘two standards’ is the most serious threat for the tech industry, as innovation will slow while costs go up.

Inflation reached the highest levels in decades in the West in 2022. One of the key drivers of this inflation was, and remains, the energy crisis. The cost of energy spiked in 2022 as a consequence of Russia’s invasion of Ukraine, especially for European nations, as well as those in emerging markets. As we foresee no conclusive end to the war, energy will continue to be an unstable platform for the global economy in 2023, particularly as a large increase in energy demand is expected due to China’s reopening. There are positive signals on the renewable energy front, such as the EU and US passing landmark clean energy packages that are expected to increase investments and reduce emissions much more quickly than initially anticipated. But still, the world is many years and perhaps decades away from stopping its reliance on hydrocarbons as the main source of energy.

BONUS PODCAST: Key Macro Risks For Tech Industry in 2023

Here is a snapshot of the rest of the top 10 risks:

  1. Emerging markets pain: The post-pandemic boom is absent in emerging markets, resulting in a notable drop in living standards. A strong US dollar, lack of inward investments, deteriorating fiscal and monetary positions, and continued volatility in energy and food supplies will hamper emerging markets’ growth potential.
  2. Tech earnings retreat: Big Tech hired too many workers and took on too many poorly thought-out projects. Now, the withdrawal of ‘easy’ money is harshly exposing the less robust companies. Sectors exposed to geopolitical tensions, regulatory scrutiny, and business models accused of brewing social ills will be most under pressure.
  3. China’s disorganized withdrawal from COVID-Zero: A sudden withdrawal from COVID-Zero has taken most of the population by surprise, leading to a massive infection wave and excessive deaths. An economic rebound is expected in 2023 with the release of pent-up demand, but the healthcare damage could linger on in the economy and society.
  4. China’s long-term economic stagnation: China saw three ‘lost’ years during the pandemic when economic growth was put on the back burner. It will be a test to see if the country can rediscover its economic growth mojo, while tackling a range of structural issues including population decline, high debt levels and a fracturing real estate sector.
  5. Cybersecurity: The pandemic and the war in Ukraine ushered in a period of persistent and high-profile cyberattacks, which will continue to pose grave risks to businesses and institutions in the coming years. There is a sense that defenders struggle to catch up with the attackers, who are richly resourced and operate nimbly, with some backed by malevolent state actors.
  6. Supply chain ‘reshoring’ not living up to expectations: Talk of building a domestic and ‘resilient’ supply chain continues to gain traction, but the global recessionary environment, the nature of economic principles, and logistical realities pose daunting challenges for those looking to move established supply chains home.
  7. Climate change: 2022 was the warmest year on record. Extreme weather caused significant human life and economic losses. Some progress has been made by the world’s most important actors, but it falls short of key climate goals. Companies are starting to modify their business practices to take a more responsible stance toward the environment, but sometimes this appears to be more of a marketing spin than real action.

Despite our gloomy tone, we would emphasize that the reason why negative shocks hit the tech industry hard in 2022 was that many were unprepared for the extent and concentration of the risks. In 2023, many of the risks we identified will become well known, and the nimblest companies will institute mitigating mechanisms to navigate the uncertain near-term future. Nevertheless, it is critical for all industry participants to be wary of potential risks and plan for potential opportunities, instead of being overwhelmed by short-term adversity.

Counterpoint subscribers can access the full report here.

We welcome questions, feedback and discussion with clients over the risks we set out here as well as the ones that didn’t make the cut.

Counterpoint Research’s market-leading Market Monitor, Market Pulse and Model Sales services for mobile handsets are available for subscribing clients.

Feel free to contact us at for questions regarding our in-depth research and insights.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China and India.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Yang Wang


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5G Smartphone Shipments Rising in Emerging Markets

Beijing, Hong Kong, Boston, Toronto, London, New Delhi, Taipei, Seoul – September 22, 2021

5G smartphone shipments rose 6.5% QoQ in emerging markets in Q2 2021, though the total shipments in these regions dropped 5% in the same period, according to the latest data from Counterpoint Market Monitor Service.

This growth in 5G shipments can be attributed to the excitement created by the iPhone 12, Apple’s first 5G-capable device, and the launch of 5G models in the affordable segments by other OEMs, like OPPO, vivo, Xiaomi and realme. Also, emerging markets, especially Southeast Asia and the Middle East, are catching up in 5G infrastructure, leading to increasing demand for affordable 5G phones.

Counterpoint Research 5G Smartphone Shipments in Emerging Markets
Source: Counterpoint Market Monitor Service

5G Increasing Share in Shipments

Major smartphone OEMs are now prioritizing 5G products in their portfolios, which is especially true in emerging markets. realme is aggressive in popularizing 5G devices. The OEM’s 5G share in its emerging market smartphone shipments went up from 8.8% in Q1 to 15.9% in Q2, ranking 3rd following Apple and Oneplus. The OEM’s global shipments increased 135% YoY to 15 million in Q2 2021, coming to the sixth for the first time. Globally, realme’s 5G devices took up 37.0% in shipments in Q2, increasing from 22.7% in Q1.

Counterpoint Research OEMs’ Smartphone Shipments and Annual Growth, Q2 2021
Source: Counterpoint Market Monitor Service
Counterpoint Research Smartphone OEM Shipment Changes: Q2 2019-Q2 2020
Source: Counterpoint Market Monitor Service

5G Battle Heating up in Emerging Markets

In the developed markets, customers now take it for granted that new smartphones support 5G. However, this perception is yet to gain ground among a majority of emerging market consumers. And the emerging markets are the ones that have the maximum potential for future growth.

India’s market, which posted 75.5% QoQ growth in 5G device shipments, will likely sustain the current strong momentum through the rest of this year. Countries in Southeast Asia will also likely see a 5G shipment increase in H2 but the real difference will be made in 2022 when major countries in the region put 5G into commercial use.

Affordable 5G products may prove to be a game changer, and OEMs with popular 5G budget phones should witness a considerable jump in their market shares. This is an opportunity no OEM would like to miss.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Archie Zhang

Yang Wang

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Related Posts

Transsion Holdings’ Journey to an IPO: Strengths and Challenges

Transsion Holdings, the top mobile phone OEM in the African market, plans to go public and list its shares on Shanghai’s tech-focused STAR Market. The company, which owns the brands Infinix, itel, and Tecno, aims to raise RMB 3 billion (approx. US$426 million) from the initial public offering (IPO).

Despite its dominance in the African mobile phone market and a solid operating revenue of over RMB 20 billion (approx. US$3.5 billion) in 2018, Transsion’s road to an IPO has not been easy. After Transsion Holdings submitted its IPO application to the Shanghai Stock Exchange, it received about 62 official queries from the regulator in May. This resulted in Transsion missing out on joining the first batch of firms to debut on the STAR Market in July. So far, Transsion’s IPO application has been approved by SSE, and it is now waiting for clearance from the China Securities Regulatory Commission. Investors still have concerns over the sustainable development of Transsion in the increasingly intense mobile phone market competition. Here, we will analyze Transsion’s strengths as well as the challenges it faces.

Strengths and Growth Opportunities

Transsion Group has built leadership in products, brand awareness, sales channels, user base, and supply chain in the emerging markets it has targeted, especially Africa. Smartphone adoption in the Middle East and Africa (MEA) region still fell below 50% as of 2018. In sub-Saharan Africa, smartphone adoption is only 36%. These are underdeveloped markets and offer a huge potential to grow. Transsion has built a strong foundation in this region and is in pole position to grab these growth opportunities.

Mobile phone shipments of the different Transsion group brands exceeded 135 million units in 2018, up 3% year-on-year (YoY), according to data from Counterpoint’s Market Monitor service. MEA, India and South East Asia (SEA) are the top markets for Transsion phones.

Exhibit 1: 2018 Mobile Phone Shipments Share of Transsion Group by Region

Source: Counterpoint Research Global Market Monitor Service Q1 2019

In MEA, Transsion was the undisputed leader grabbing over 30% share in 2018. Its share was twice that of Samsung (15%), the second-largest mobile phone OEM in the region. Transsion also dominates Nigeria, the largest market in Africa by population, with close to 60% of market share. In India, the second-largest market for Transsion, it ranked fourth in 2018 with a 6% market share, behind Jio (21%), Samsung (17%), and Xiaomi (12%). In SEA, Transsion ranked seventh with a 4% share of the market. In Bangladesh, Transsion has emerged as the second-largest player with a 13% market share.

According to the latest research from Counterpoint’s Market Outlook service, emerging smartphone markets like India, SEA, and MEA have the best growth potential. These regions will be critical for OEMs who are seeking expansion to offset the declining smartphone sales in mature markets.

With established channel resources and brand awareness in MEA, India, and Bangladesh, Transsion is likely to have a competitive edge over its competitors in grabbing the growth opportunities these markets offer.

The capability to provide African consumers with highly localized products is the key to Transsion’s success. Exhibit 2 shows some of the examples of how Transsion group managed to create product differentiations to out-perform in Africa.

Exhibit 2: Transsion’s technological partnerships and solutions for localization of products in Africa

Source: Transsion Holdings Prospectus, Counterpoint organized

Besides localizing hardware design, Transsion also invests in building a localized mobile internet ecosystem.

For the details of Transsion’s mobile internet services in Africa, the full analysis on its strengths and challenges, the comparison with HOVX, as well as evaluation on Transsion’s competitiveness in its targeted emerging markets, please refer to the full report at this link.

Smartphone Growth in Emerging Markets Will Continue in 2019

Recently, the International Monetary Fund (IMF) projected that economic growth in emerging markets, during 2019, will be faster (4.7%) than developed markets (2.1%). This is a good omen for the smartphone market, which is still reeling from its first ever annual decline in 2018.

Although the economic strength of emerging markets will not be good enough to bring back growth to the overall smartphone market, they can certainly help arrest the decline. This is why we believe that the smartphone supply chain will keep a close eye on the emerging markets in 2019.

The IMF defines emerging markets (Exhibit 1) based on the GDP and other economic parameters.

Exhibit 1: Emerging Markets as defined by the IMF

Argentina Bangladesh South Africa Bulgaria
Brazil India Turkey Hungary
Chile Indonesia Poland
Colombia Malaysia Russia
Mexico Pakistan Ukraine
Peru Philippines Romania
Venezuela Thailand


Impact on the Global Smartphone Markets

Emerging markets alone contribute to 59% of global smartphone shipments. Even if one excludes China, they contribute to 32% of the global smartphone market. As per Counterpoint’s Market Outlook, emerging markets excluding China (EMXC) will grow faster (6%) than in 2018 (4%). The growth rate continues to be faster than the overall smartphone market, which is likely to see a second successive year of decline in 2019. Therefore, growth in emerging markets is a positive indicator for certain OEMs looking to expand in these markets.

In 2018, 14 out of 23 emerging markets show positive year-on-year (YoY) smartphone growth. This year, 18 out of 23 emerging markets are likely to grow YoY. The markets which will drive the smartphone growth include Bangladesh (37%), India (11%), Colombia (9%), and Philippines (9%). We believe that the low internet penetration in these countries, in terms of unique subscribers, and a healthy GDP growth predicted for 2019 will propel smartphone sales. The internet penetration in these countries, in terms of unique subscribers, is still below 50%. Other factors which will work in favor of these countries is a healthy mix of sub-US$100 installed base of smartphone users who are likely to upgrade.

Bright Spots Among Emerging Markets

Asian emerging markets will lead the growth and are also likely to benefit from the ongoing US-China trade war. If companies decide to re-think their supply chain, countries like Malaysia, India, Indonesia, Thailand, and India will stand to benefit.

Moreover, the Indian economy continues to perform well with healthy domestic consumption. The 2019 general elections brought a strong government. This is likely to bring in certainty in regulatory and policy frameworks which will aid overall economic growth. Bangladesh, at the same time, is pushing is domestic manufacturing and focusing on financial and digital inclusion of its citizens. An uptick in employment levels drives the Philippines’ growth. This will have a positive impact on the replacement cycle of the smartphones, especially in the sub-US$100 segment.

Overall, the LATAM region is recovering with high growth rates estimated for countries like Peru, Chile, and Colombia. Colombia’s market is undergoing positive smartphone growth with the new government at the center betting big on a digital economy.

Other markets which are likely to see smartphone growth include Indonesia, Pakistan, Peru, Russia, Thailand, and Ukraine.

Exhibit 2: Smartphone Annual Growth Rate in Emerging Markets – 2019 (e)


Strugglers within Emerging Markets

Of course, not all emerging markets have a positive outlook. Some will fare better than others. There are certain emerging markets which will continue to undergo macroeconomic, regulatory, and political challenges. These markets include Argentina, Brazil, Mexico, and Turkey. Brazil’s economy is not picking up so far, and it will most likely not happen throughout 2019. However, the decline will not be as steep the one it experienced in 2018.

Turkey is bracing for a long recession ahead with inflation reaching a 15-year high. Currency in these markets remains volatile too. Argentina is unlikely to grow too, and the upcoming general election in late 2019 will be key in terms of providing a roadmap for certain reforms and economic policies. Mexico remains in the shadows of ongoing trade war and concerns over any upcoming tariffs. However, the US has recently scrapped plans to increase tariffs as part of an agreement between the two countries on immigration issues. But uncertainty still looms over the future.

Emerging Europe is facing a slowdown driven by a recession in Turkey. Russia is likely to grow, but Ukraine faces tighter monetary conditions. The inflationary pressure for emerging European markets will remain throughout the year.

To summarize, we believe that emerging markets will exhibit stronger growth in 2019 as compared to last year. This is a positive trend for the top five OEMs in these markets as their combined share has been steadily increasing over the past few quarters. Users in these emerging markets are now empowered and becoming digitally literate. Financial inclusion is happening, and dissemination of information for users is stronger than before.

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