According to Murata Manufacturing Co., the global smartphone market has finally bottomed out and will rebound this year, owing to robust demand in India and other countries of Southeast Asia.

In 2023, there will be 6.92 billion smartphone users worldwide, accounting for 85.82% of the global population. This is an increase from 2016 when 3.668 billion users represented 49.40% of the world population. 

Cell phone use is predicted to expand at a steady 2-3% year-over-year (YoY) rate by 2025. This translates to little less than a billion new users. By 2025, the worldwide smartphone user base is estimated to reach 7.34 billion.

Low-cost cell phones are driving sales, and the total market will likely expand by a single-digit percentage on a unit basis this fiscal year through March and the next, according to President Norio Nakajima in an interview Tuesday.

Kyoto-based Murata, the world’s largest producer of multilayer ceramic capacitors, provides a wide range of smartphone components used by Apple Inc., Samsung Electronics Co., and Chinese manufacturers, and is regarded as a leading indication of gadget sales.

Nakajima’s confidence comes in the wake of reports of sustained weak demand in China, the world’s biggest smartphone market, which has dampened expectations. While Chinese consumer desire is poor and the market there is expected to contract further, momentum in India is “promising,” according to the 62-year-old.

“Increased adoption of 5G and demand growth in India, which overtook China this year to become the world’s most populous country, will be key to growth, he said. Demographics indicate first-time smartphone buyers will continue to push up sales there for years to come,” Nakajima said. “That’s in contrast with China’s higher rates of 5G adoption, which means weaker replacement demand,” he said.

The Indian market is dominated by smartphones running Alphabet Inc.’s Android software, while Apple’s iPhone has recently made inroads, and CEO Tim Cook has made a point of growing the company’s presence there.

With escalating US-China tensions, India’s strategic prominence in the IT supply chain has expanded proportionally. Some iPhone suppliers, like Hon Hai Precision Industry Co., have already begun manufacturing in India.

“Murata has no production sites in India and has no immediate plans to build one, but the component maker will study its options there so that it can move quickly if necessary,” Nakajima said. “For now, Murata can ship its components to India from existing facilities located elsewhere in the region, such as Malaysia,” he said.

Murata expects operational income of 220 billion ($1.5 billion) for the current fiscal year, a 26% decrease from the previous fiscal year.