The latest data from International Data Corp. (IDC), global smartphone shipments were down by 9.7% year over year (YoY) to 301.9 million units in the third quarter of 2022 (Q3 22), making it the fifth consecutive quarter of decline. IDC said the market struggles because of weakened demand and economic uncertainties.
This is the fifth consecutive quarter of decline for the smartphone market.
“A majority of the decline came from emerging markets where lack of demand, rising costs, and inflation impacted consumers with lesser disposable incomes,” said Nabila Popal, research director with IDC’s Worldwide Tracker team. “With high inventory coming into the quarter, shipments and orders by OEMs were further reduced in an attempt to deplete inventory.”
IDC noted that all vendors, including top brands Apple and Samsung were not spared of the slump. The market intelligence firms also pointed out that Chinese vendors continue to suffer the most.
“While Apple is the only vendor to deliver positive growth this quarter, it still faced challenges as its growth was stunted in many markets, including China, due to the poor macroeconomic situation,” Popal said.
IDC said it is important to watch the Chinese market because its size alone has a significant impact on the global results, thus expectations for China should remain relatively unchanged at a decline of just over 12% for the quarter. Developed markets like North America, Western Europe, and Japan will do moderately better, but this still implies low to mid-single-digit declines. Emerging markets in Asia Pacific, Latin America, the Middle East, and Africa should see more significant double-digit declines.
“Developed markets that often sell more premium devices are faring better than emerging markets where smartphones sell for a fraction of the cost,” said Ryan Reith, group vice president with IDC’s Worldwide Mobile and Consumer Device Trackers. “We believe this is largely supported by the expansion of installment plans offered through telcos, retail channels, and even direct from vendors. Promotional activity around trade-in offers also supports that shift. However, as we look toward next year and beyond, if the global market is going to grow, it will need a strong recovery in emerging markets to make that happen.”
Despite the challenging environment, vendor positioning did not change from last quarter. Samsung held the top spot with a 21.2% share, Apple came in second with a 17.2% share, while Xiaomi came in third with a 13.4% share. vivo and OPPO ended the quarter tied for the fourth position, each with an 8.6% share. Except for Apple, all the top vendors suffered year-on-year declines. However, while Samsung and Xiaomi registered single-digit declines, vivo and OPPO continued to suffer high double-digit decreases.
“Looking to 2023, the market’s expected recovery, which we continue to believe will happen, will be pushed further into the year. Moreover, we now expect a steeper shipment decline for 2022 and a softer recovery in 2023,” Popal said.