- Weak demand is seen as a major hindrance to this industry’s growth
- The top five smartphone market leaders in 2022 remained the same as in 2021
Recent reports suggest that smartphone sales worldwide registered a decline in the fourth consecutive quarter. Canalys’ latest research puts the figures at 296.9 million units in Q4 2022, after falling 18% in this quarter. It cited the falling demand as a major factor behind vendors shipping less than 1.2 billion units in full-year 2022, leading to a 12% drop in annual shipments.
This year, the top five vendors, which are Samsung, Apple, Xiaomi, OPPO, and vivo — didn’t change their positions and remained the same as in 2021. However, as Canalys analyst Sanyam Chaurasia put it, leading markets struggled with sharp shipment declines toward the end of 2022, hitting both Samsung and Apple hard.
Chaurasia added, “Despite showing some stabilization in Q3, Asia Pacific and Europe suffered their worst Q4 performances in history in 2022. Stocks piled up in top markets, such as India and the People’s Republic of China (Mainland), leading to a disappointing final quarter. Meanwhile, economic distress dented consumer spending in North and Latin America. Vendors must carefully plan their new product launches as retailers and telcos are reluctant to increase inventory levels.”
Le Xuan Chiew, a research analyst at Canalys pointed out that in 2023, Apple and Samsung are better placed to navigate ongoing uncertainties thanks to their high-end dominance. Chiew said: “The popularity of iPhone Pro models will help Apple extend its revenue share, despite overall demand being under pressure. Meanwhile, the unexpected supply challenges with the Pro models have led to the acceleration of Apple’s production diversification, which will help the company mitigate the supply risk and ongoing geopolitical tensions. Samsung is also maintaining its profitability focus by strengthening its high-end portfolio and creating a premium niche segment via its Fold series. On the other hand, Chinese vendors are still vulnerable to international market headwinds and a cut-throat home market. Beyond poor demand, channel inventory, margin pressure and operational efficiency also challenge their expansion strategies.”
Calling 2023 a tough year, an analyst at Canalys, Amber Liu said, “The road to recovery for the smartphone market is clouded with uncertainties. Vendors and channels will watch the market dynamic closely and take a cautious approach. Smaller vendors must focus on securing profitability by finding niche opportunities with streamlined portfolios and efficient channel management. On the other hand, the popular brands will investigate ways of driving demand through their established IoT ecosystems, differentiated high-end offerings and effective channel and promotional strategies.”
Canalys is an independent analyst company which delivers smart market insights to IT, channel and service provider professionals around the world. Canalys’ PC Analysis service provides quarterly updated shipment data.
