iPhone sales soar even as global smartphone shipments decrease in 2022 Q1

Study into global smartphone arena finds Apple on a high while shipments by Chinese manufacturers have fallen sharply due to the slowdown in their domestic market, leading to global device industry maintaining negative growth trend

Smartphone shipments totalled 308 million units in the first quarter of 2022, representing negative growth of 12.9% compared with the same period last year, according to Omdia, continuing a negative growth trend that has been the case for the past three consecutive quarters. But one company that has bucked the overall picture so far this year is Apple.

Omdia’s Global smartphone shipment preliminary result – 1Q22 report found that the depressed market growth was noticeably affected by a sharp fall in shipments by Chinese manufacturers due to the slowdown in their domestic market.

The ongoing spread of Covid-19 in China in the first quarter of 2022 had a negative impact on the smartphone supply chain and demand in general as the Chinese government locked down major cities including Shenzhen and Shanghai. This, coupled with the contraction in consumption caused by the continued economic slowdown, was said to have resulted in a sharp decrease in shipments from Chinese companies, which are highly dependent on domestic demand.

The report also showed that Samsung shipped a total of 73.8 million smartphones, a decrease of 2.9% compared with the same period in the previous year, but an increase of 6.8% compared with the previous quarter. The Korean supplier’s market share increased by 2.5 percentage points compared with the same period last year to 24%, due, said the analyst, to a small decrease in shipments compared with its Chinese rivals.

Omdia noted Samsung’s dependence on China was very low for both production and sales. In 2019, all manufacturing plants in China were withdrawn, and currently only some models are being produced through partners in China. In addition, Samsung’s smartphone market share in China has remained below 1% for several years, even though the newly released Samsung Galaxy A and S series this year and the FE models of the previous S series were consistently selling well.

The study also revealed that Xiaomi shipped 42.4 million units in the first quarter of 2022, 7.1 million less than the 49.5 million units of last year. Intensified competition with other Chinese companies in India and Southeast Asia, which are Xiaomi’s main markets, and the slump in the domestic market caused the decline. However, the study also stressed that its dependence on the Chinese domestic market was relatively low compared with Oppo and Vivo, so the year-on-year shipment decline was 14.3%, lower than that of competitors.

Oppo and Vivo, which are highly dependent on China’s domestic market, shipped 25.3 million and 24.1 million smartphones respectively, down 33.1% and 36.9% compared with the same period last year. As a result, market share of the two companies fell to 8.2% and 7.8% respectively, compared with the same period last year. On top of weakening local smartphone demand in China, the growing business of Honor took market share and shipments from the two companies. More than half of Oppo and Vivo shipments were derived from the local market.

For its part, Omdia noted that Honor was steadily increasing its market share in China. After being separated from Huawei in November 2020, Honor was excluded from sanctions by the US. After making changes to the organisation and product lineup, quarterly shipments have been maintained at around 15 million units from the second half of 2021. In the first quarter, Honor’s shipments were 15.2 million units, an increase of 322.2% and 1.3% compared with the previous year and the previous quarter respectively.

Transsion’s shipments, including Tecno, iTel and Infinix, totalled 15.4 million units. Transsion’s shipments, which were expanding from the Middle East and Africa markets to the Asian market, were 19.8 million units in the first quarter of 2021, an increase of 143% compared with the same period of the previous year, but this year it recorded a 22.4% negative growth. The decline in shipments in the first quarter was caused by the chipset shortages last year, not market demand. However, the company maintained sixth place in terms of shipments and narrowed the gap in market share with Vivo, in fifth place, to 2.8 percentage points.

Like Honor, India’s Realme found favour in its local market. Realme shipped 14.6 million units, an increase of 17.7% year on year. Honor and Realme recorded a market share of 4.9% and 4.7%, respectively.

In ninth and tenth places in the top suppliers list, Motorola and Huawei shipped 12 million units and 5.6 million units, respectively. The former, which is filling the vacancies of LG and Huawei in North and South America, has increased shipments mainly for mid-end models. Huawei, which can still only sell 4G smartphones, was found to be experiencing difficulties in market expansion in China. Huawei’s market share fell sharply from 4.2% last year to 1.8% this year.

Yet by far the star act for the first quarter of 2022 was Apple. Omdia calculated that Apple shipped a total of 56.4 million units in the quarter, with its market share increasing significantly to 18.3%. Apple’s market share in the first quarter increased from 13.3% in 2019, 14% in 2020, and 15.6% in 2021 to 18.3% this year, increasing for four consecutive years. Shipment volume increased by 2.5% compared with the same period last year, making it one of the three companies that recorded year-on-year growth among the top 10 brands. Apple’s dominance in the premium market is becoming more and more consolidating.

The key driver of for the shipments spike was sales of the iPhone 13 series released in 2021. In its quarterly results for the three-month period to 26 March 2022, Apple posted a record March quarter revenue of $97.3bn, up 9% year on year,  generating $50.57bn in iPhone sales alone, up 5.49% compared with the same period in 2021.

Going forward, Omdia predicts the lockdown of major cities in China will continue into the second quarter, and that the Russian invasion of Ukraine will have a negative impact on demand for smartphones in the quarter as it directly or indirectly affects not only these two countries but also other regions. It is feared that this will negatively affect overall demand over the course of 2022.

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