Global smartphone shipments decline year on year for eighth consecutive quarter

Omdia study reveals headwinds now buffeting the once unstoppable smartphone industry and predicts times will be tough for the industry until the end of 2023

A hoped-for bounceback in the smartphone market has not arrived, with Omdia research showing a 9.5% decrease in shipments compared with 12 months ago and a 1.2% drop in the second quarter of 2023 compared with the previous quarter.

This meant eight consecutive quarters of year-on-year decline in overall smartphone shipments, according to the study. Smartphone shipments totalled 265.9 million units in the second quarter of 2023, and somewhat worryingly, the three largest manufacturers – Apple, Samsung and Xiaomi – all saw their shipments fall more than 10% from the second quarter of 2022 to the second quarter of 2023. Only Transsion Holdings and Huawei did not witness declines year on year.

Omdia attributed the falls to a number of factors, including the recovery period of smartphone demand seen over the Covid-19 pandemic between the fourth quarter 2020 and the third quarter 2021. The analyst stressed that the declines were also indicative of the range of challenges that have faced the industry and global economy, such as component supply issues and shrinking consumer demand in the midst of high inflation.

Looking at the key players, Omdia observed that even though Samsung had the most shipments in the second quarter of 2023, reporting 53.3 million shipments, it saw a 11.5% dip from the first quarter, following the release of the S23-series, but that more worryingly there was a 14.3% fall year on year. The analyst said this followed weak demand for mid- and low-end smartphones due to the ongoing economic recession, and sales of Samsung's Galaxy A series significantly declining. Despite this, Samsung maintained its market share of 20%, and its position as the largest player in the smartphone industry.

After what was an undoubtedly successful opening quarter of the year with its flagship iPhone 14 series, and while it seemed that the CE giant was more resilient to the negative downwinds of the economy, Omdia noted that Apple has now begun to feel the squeeze. Apple saw a big quarter-on-quarter fall, recording 43.2 million shipments, a 24.6% fall from the first quarter 2023 and a 11.7% fall year on year from the second quarter of 2022. As such, Apple’s market share has fallen to its usual level for the second quarter of each year, at 16%.

“Apple has strong sales of premium models such as the iPhone 14 Pro and Pro Max, while the standard and Plus models saw sluggish sales compared to their predecessors,” said Omdia senior research manager Jusy Hong. “Normally, from the second quarter, the standard model should drive up the overall quantity, but this year it is different. Demand for Pro and Pro Max is increasing, especially among high-income consumers.”

Xiaomi’s shipments also continued to fall globally, to 33.2 million, a 15.7% fall year-on-year. It still occupies the third spot globally, but is facing stiff competition from other Chinese manufacturers Oppo and vivo. Omdia pinpointed the weak Indian market as remaining a problem for Xiaomi, as it forms its largest territory. On the upside, Omdia noted that the company was further establishing itself in Western Europe, something many other Chinese brands have failed to do.

Oppo Group (including OnePlus) recorded 25 million shipments in the first quarter 2023, a fall of 10.5% from the previous year, while Transsion Holdings recorded a combined total of 24.5 million, a 38.4% increase year on year from the 17.7 million shipped in the second quarter 2022. This pushes Transsion Holdings ahead of vivo to be the fifth largest smartphone supplier in the second quarter of 2023, coming after a period of long stagnation as it was digesting the inventories from the first quarter of 2023. Omdia regarded its efforts to expand into more markets as successful.

The main reason for the increase in shipments was that Transsion completed inventory adjustment in the first quarter this year and increased supply of new products from the second quarter,” added Omdia principal analyst Zaker Li. “Transsion is targeting the low-end smartphone market in more countries in Asia and Oceania.”

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