The smartphone market has been experiencing a decline, the largest ever fall since 2013. Worldwide smartphone shipments recorded a fall of 18 percent in quarter 4 of 2022, especially during the holiday season. It was a tough, challenging season for manufacturers and sellers across the brands.
According to IDC’s quarterly mobile phone tracker, Q4 of 2022 recorded 300 million smartphone units shipped worldwide, while in Q4 of 2021, the total shipments were 367 million units, total 18% fall.
Apple leads the top spot on the list; in Q4 2022, worldwide, it shipped only 72.3 million units, while in Q4 2021, it was 85 million units, total 15% decline.
Worldwide Samsung smartphone shipment in Q4 2022 was 58 million units, while in Q4 2021, it was 69 million units, total 16% decline.
26% fall in Xiaomi smartphone shipments worldwide; in Q4 2022, it shipped a total of 33 million units, while in Q4 2021, it was 45 million units.
“We have never seen shipments in the holiday quarter come in lower than the previous quarter. However, weakened demand and high inventory caused vendors to cut back drastically on shipments, heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth” said Nabila Popal, research director with IDC ‘ s Worldwide Tracker team.
“Vendors are increasingly cautious in their shipments and planning while realigning their focus on profitability. Even Apple, which thus far was seemingly immune, suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China. What this holiday quarter tells us is that rising inflation and growing macro concerns continue to stunt consumer spending even more than expected and push out any possible recovery to the very end of 2023, said Nabilla.
Year-Over-Year data, CY2022, Worldwide Smartphone Shipments
There are several reasons why smartphone shipments currently experiencing a decline.
Consumer spending: Economic uncertainty can decrease consumer spending, as people are less likely to make large purchases such as smartphones when facing financial insecurity.
Inflation fear: It can reduce consumer purchasing power, making goods and services more expensive. This can lead to consumers being less likely to purchase new smartphones as they may not be able to afford them.
Saturation of the market: Many people already own smartphones and do not see a need to upgrade to a newer model as frequently as they used to.
Economic downturn: Consumers face financial uncertainty, and they are less likely to make large purchases such as smartphones.
Impact of the pandemic: The pandemic fear is not entirely gone, the news and fear are still here. It has already affected the supply chain and logistics worldwide.
“We continue to witness consumer demand decrease as refresh rates climb past 40 months in most major markets, With 2022 declining more than 11% for the year, 2023 is set up to be a year of caution as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory,” said Anthony Scarsella, research director with IDC’s Worldwide Quarterly Mobile Phone Tracker.
Overall, economic uncertainty, inflation fear, and recent layoffs may further impact the 2023 smartphone shipments. As a result, it can reduce consumer spending and business investment, increase supply chain disruptions, and cause more job losses.