Even the first calendar quarter of 2023 did not bring any major turnaround in the development of the smartphone market. The year-on-year volume of deliveries to distribution fell by almost 15% to 269 million units, according to the analysis of the research company IDC. This is the seventh quarter of declines in a row, and according to analysts, the downward trend is not going to reverse easily.
The main reason for the lower sales is the continued tepid demand from consumers who are plagued by economic uncertainty and high inflation, and for whom buying new phones is not a current priority. According to IDC, stock levels on the distributor side are still high across the world’s regions, but the situation has already improved compared to the period six months ago, helped by a lot of promotional and sales events.
Development of market shares by quarters over the last year. Apple swapped positions with Samsung in the Christmas quarter, otherwise the order of manufacturers did not change | Source: IDC
“The industry is going through a period of inventory liquidation and adjustment of sales strategies. Manufacturers remain cautious and take a conservative approach. They are not chasing market share at the cost of overstocking. This is the correct course of action. Everyone is waiting for the trend to reverse and wants to be the first to ride the wave of recovery. But that’s tricky. Anyone who jumps in too early will drown in excess inventory. Now more than ever, it is important to keep up with the market.” IDC research director Nabila Popal advises manufacturers on the optimal strategy.
Analysts assume that the mentioned recovery of the market may occur at the end of this year and point out that the market will face at least two more difficult quarters. The Christmas quarter of 2023 could be the first to bring year-on-year growth to the smartphone market. Almost all world regions suffered double-digit declines in the first quarter. China saw a nearly 12% decline, developed markets such as the US and Western Europe fared better than others with declines of 11.5% and 9.4%. Emerging markets such as APAC, CEE and MEA saw a larger decline of 17 to 20%.
Samsung returns to the top, but with Apple in the back
“The biggest decrease on the supply side in recent months was mainly seen by brands that produce low- and mid-range smartphones. This is a segment where competition is high and margins are low. These manufacturers are usually more hesitant to go back to ramp up production. We are beginning to see signs that optimism is growing among these firms as well,” explained IDC research vice president Ryan Reith.
From the point of view of individual brands, in the first quarter, Samsung returned to “its” first place, which in the previous Christmas quarter had to temporarily relinquish the lead to Apple. However, Samsung’s lead over Apple is significantly smaller than in the first quarter of last year – the year-on-year decline in Samsung’s deliveries is even greater than the decline of the entire market, which also resulted in a loss of market share. On the contrary, with its smaller year-on-year decline, Apple forced an increase in market share by 2.5 percentage points.
Xiaomi also fell faster than the market year-on-year, which still managed to defend its third place. However, the lead over the fourth Oppo was significantly reduced, because this Chinese company did not decline as fast as the entire market. This time there has also been a clear separation of the two brands of one BBK Electronics holding – Oppo is clearly more successful than its sister Vivo, and the mutual difference in deliveries no longer moves to the limit of statistical error. Oppo is fourth and Vivo with a clear gap of 7 million smartphones shipped in fifth place.
2023-04-28 14:44:09
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