According to a report by Canalys, in the third quarter of 2022, the global smartphone market recorded its third consecutive decline this year, dropping 9 per cent year-on-year, marking the worst Q3 since 2014. The report states that smartphone sales have slumped in 2022 amid a gloomy economic outlook, prompting consumers to delay purchasing electronic hardware and prioritise other essential spending. This will likely continue to dampen the smartphone market for the next six to nine months.
As per the report, Samsung retained its leading position with a 22 per cent market share driven by heavy promotions to reduce channel inventory. Apple was the only vendor in the top five to record positive growth, improving its market position further with an 18 per cent share during the market downturn due to the relatively resilient demand for iPhones. Meanwhile, Xiaomi, OPPO and Vivo continued to take a cautious approach to overseas expansion given domestic market uncertainty, retaining 14 per cent, 10 per cent and 9 per cent global market shares, respectively.
Commenting on the report, Amber Liu, analyst, Canalys, said, “The smartphone market is highly reactive to consumer demand and vendors are adjusting quickly to the harsh business conditions. For most vendors, the priority is to reduce the risk of inventory building up given the deteriorating demand. Vendors had significant stockpiles going into July 2022, but sell-through gradually improved from September 2022 owing to aggressive discounting and promotions. The pricing strategy of new products is cautiously crafted, even for Apple, to avoid significant pushback from consumers who now tend to be very sensitive to any price hike.”
Meanwhile, Sanyam Chaurasia, analyst, Canalys, said, “As demand shows no signs of improvement moving into the fourth quarter and first half of 2023, vendors have to work on a prudent production forecast with the supply chain while working closely with the channel to stabilize market share. Going into the sales season, consumers who have been delaying purchases will expect steep discounts and bundling promotions as well as significant price reductions on older generation devices. Compared to the strong demand period of the previous year, a slow but steady festive sale is anticipated in Q4 2022. However, it will be too soon to see the upcoming Q4 as the real turning point of market recovery.”
