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Smartphone Market Drops 9-12% In Q3 Due To Weak Demand: Market Trackers

NEW DELHI: The global smartphone market fell between 9% and 12% to approximately 298-302 million units in the third quarter due to weak demand amid economic uncertainties, according to market trackers.

Canalys said weak demand in the quarter ending September caused shipments to decline 9% year-over-year to 297.8 million units, while preliminary data from IDC revealed a 9.7% year-over-year decline to 301, 9 million units. Counterpoint reported a 12% year-over-year drop to 301 million units in the same quarter.

Smartphone Market Drops 9-12% In Q3 Due To Weak Demand: Market Trackers

IDC said this is the largest third-quarter drop in history and the fifth consecutive quarter of falling shipments. By contrast, Counterpoint said international political tensions that gave rise to economic uncertainty weighed on the smartphone market even though it reversed its slide below 300 million last quarter, due to a slight recovery in Apple Y Samsung shipments.

Samsung was the top smartphone maker, shipping 64 million units despite a drop of around 8% year-over-year in the third quarter. oppoinstead, it fell more sharply with 22% to ship 25-29 million units and secured the fourth position, according to data from research firms.

Smartphone Market Drops 9-12% In Q3 Due To Weak Demand: Market Trackers

iPhone maker Apple, in second place, was the only company to grow in the third quarter due to strong demand for the iPhone 13 and the recently released iPhone 14 series. third place xiaomi suffered an 8% drop just because it managed to leverage its global presence to find growth opportunities, they said.

‘Premium phones that withstand the economic recession better than mid-range and low-end phones’

“The performance of the high-end segment was the only standout this quarter,” Runar Bjørhovde, a research analyst at Canalys, commented on vendor performance. “Apple achieved its highest third-quarter market share to date, driven by both the iPhone 13 and the newly released iPhone 14 Serie.”

In the Android space, Samsung has updated its foldable portfolio and significantly increased its marketing initiatives to generate interest and demand for its new flagship products, Bjørhovde said.

“Low to mid-range demand has been affected, making it difficult for providers to navigate a competitive segment. Xiaomi managed to capitalize on its global scale with a revamped product lineup to offset declines in its home market. oppo and alive are still significantly affected by the downturn in the China market, but both have shown small signs of recovery,” he added.

“Most major suppliers continued to see annual declines in shipments in the third quarter of 2022. The escalation of Russia’s war in Ukraine, mistrust and ongoing political tensions between China and the US further dent confidence consumer, hitting already weakened demand,” Harmeet Singh Walia, senior analyst at counterpoint research highlighted the general dynamics of the market.

“This is also on top of a slow but steady lengthening of smartphone replacement cycles with ever more durable smartphones and as technological progress slows. This accompanies, and to a lesser extent advances, a drop in shipments of mid-range and low-end smartphones, even as the premium segment better weathers the economic storm,” Walia said.

Ryan Reith, group vice president of Worldwide Mobile and Consumer Device Trackers at IDC, noted that developed markets that sell more premium devices are doing better than emerging markets where smartphones are sold at relatively low prices.

Smartphone Market Drops 9-12% In Q3 Due To Weak Demand: Market Trackers

“We believe this is largely supported by the expansion of payment plans offered through telcos, retail channels, and even directly from providers. Promotional activity around exchange offers also supports that change,” Reith added.

Market outlook

Canalys analyst Sanyam Chaurasia said Europe and Asia Pacific outperformed the rest of the world in the third quarter. “Europe avoided a significant drop helped by a surge in shipments to Russia. Here, Chinese suppliers took advantage of short-term opportunities to supply the channel in a market that has been under-supplied in previous quarters. APAC had a large variation across different markets, but sequential improvement in demand in India, Indonesia and the Philippines helped the region stabilize its performance.”

He added that carrier-dominated markets such as North America and Latin America exhibited increasingly cautious sentiments about inventory management ahead of heading into the big holiday seasons, contrasting with a much more optimistic view in the third quarter of the year. last year.

Counterpoint Research Associate Director Jan Stryjak noted that the full impact of the iPhone 14 may be felt in the fourth quarter, resulting in a further quarterly improvement in the next quarter, but attempts by central banks to control inflation will reduce further consumer demand.

“Channel inventory is even higher and OEMs will also focus on shedding excess inventory in Q4. So shipments are unlikely to reach last year’s levels, let alone pre-pandemic fourth-quarter levels of more than 400 million units. Looking ahead to 2023, we expect slow demand with increasing replacement rates, especially in the first half of the year,” Stryjak said.

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