The smartphone industry had a rough end to 2022, with the “largest-ever decline” in shipments in Q4, though Samsung actually managed to gain some traction in the increasingly competitive space.
A report from the IDC this week details smartphone shipments globally over the course of Q4 2022, and it was certainly a drop from last year. Overall smartphone shipments dropped by 18.3%, dipping to just over 300 million total shipments for the quarter, compared to over 367 million in the same period in 2021.
The timing of this is especially notable as it included the holiday season and major retail events such as Black Friday. IDC research director Nabila Popal adds that inflation concerns may push recovery for the smartphone market out to the “very end” of 2023.
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. 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.
Looking at those numbers further, Android’s largest vendor, Samsung, shipped roughly 10 million fewer units in Q4 of 2022, seeing its market share rise from 18.8% in Q4 2021 to 19.4% in Q4 2022. And on the year as a whole, Samsung actually gained market share over competitors such as Xiaomi. The company ended with a 21.6% contribution to total smartphone shipments, up from 20% in 2021, and beating out Apple at 18.8% and Xiaomi at 12.7%, the latter having dropped from 14% the prior year. That higher market share doesn’t make up for the 4.1% drop in total smartphone shipments for Samsung in 2022, but it pushes the company that much further into the lead spot.
With new devices such as the Galaxy S23 series on the horizon, it will certainly be interesting to see how the market comes together through 2023. The IDC believes this will be a “year of caution” on the part of smartphone makers as many look to avoid “excess inventory.” It’s speculated that “generous trade-in offers” could be one way in which smartphone makers attempt to push newer models as customers are now keeping phones for around 40 months, which also makes buying used smartphones more attractive.
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