During the last Christmas season, smartphone sales decreased by about 20% year over year as a result of waning consumer demand brought on by rising prices and uncertain economic conditions. According to IDC, it’s the “largest-ever decline in a single quarter,” and it helped make 2022’s yearly sales of smartphones the lowest since 2013.
IDC, said on Thursday that shipments fell by 18.3% in the December quarter compared to the same period last year, to a little over 300 million units. The researchers found that shipments dropped 11.3% for the year, which was the lowest number in a decade.
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.
-Nabila Popal, Research Director at IDC
Apple remained the world’s leading manufacturer of smartphones. According to IDC, Apple delivered 72.3 million iPhones in the fourth quarter, a 14.9% decrease from the same period last year. Apple has a market share of 24.1%. Even though Apple released its newest model, the iPhone 14 series, before the important Christmas quarter, sales fell. After the world’s largest iPhone production facility in Zhengzhou, China, wasthe impacted by a COVID outbreak and worker protests, Apple encountered a variety of supply chain challenges in the third quarter.
Shipments from Samsung, the second-largest smartphone manufacturer, fell 15.6% year over year to 58.2 million devices. Following a drop in demand for electronic products in the most recent quarter, Samsung recently issued a profit warning. Samsung did not introduce a brand-new flagship smartphone for the fourth quarter, but the company will likely unveil it during an event on February 1.
Third-placed Chinese electronics firm Xiaomi delivered 33.2 million smartphones in the last quarter of the year, a 26.3% decrease from the same period last year. The top five smartphone manufacturers, which also include Chinese smartphone manufacturers Oppo and Vivo, all had that greatest fall.
IDC Believes Companies are Prioritizing Clearing up Inventory with Consumers Reluctant to Switch to a New Phone
IDC claims that smartphone suppliers are being careful about shipments, with sales and promotions during the holidays using up current inventory rather than fresh deliveries. All of this indicates a decline in customer demand as well as the fact that the capabilities of current cellphones have kind of peaked, with older devices still performing the job just fine. IDC says it’s seeing people wait until 40 months after purchase to update their handsets “in most major markets.”
Although industry elites like Samsung and Apple would not benefit from a weakened smartphone market, bargain-hunting customers could.
Consumers may find even more generous trade-in offers and promotions continuing well into 2023 as the market will think of new methods to drive upgrades and sell more devices, specifically high-end models.”
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.
-Anthony Scarsella, IDC
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