Smartphone Shipments Plunge In Largest Ever Decline

The Tap Economy Part 1: Screen Commerce

Worrying development. Shipments of new smartphones plunged 18.3 percent in Q4 2022, with total shipment in 2022 down to 2013 levels

Analyst house and market researcher IDC has revealed a dramatic decline in shipments of new smartphones and mobile devices around the world.

IDC announced that smartphone shipments have suffered the largest-ever decline, with a 18.3 percent drop in the holiday quarter and a 11.3 percent decline in 2022.

The IDC figures are especially alarming due to the fact that the fourth quarter is usually a big holiday shopping period for device makers, but the declines come amid ongoing economic concern and falling consumer demand.

graph, figure money financial decrease downturn © Prixel Creative Shutterstock

Largest ever decline

IDC’s worldwide quarterly mobile phone tracker data showed that worldwide smartphone shipments declined 18.3 percent year over year to 300.3 million units in the fourth quarter of 2022 (4Q22).

IDC warned that the drop marks the largest-ever decline in a single quarter and contributed to a steep 11.3 percent decline for the year.

Indeed, IDC said that 2022 ended with shipments of 1.21 billion units, which represents the lowest annual shipment total since 2013 “due to significantly dampened consumer demand, inflation, and economic uncertainties.”

IDC warned that this tough close to the year puts the 2.8 percent recovery expected for 2023 in serious jeopardy with heavy downward risk to the forecast.

Shipments represent the devices that companies such as Apple and Samsung send to retailers and mobile carriers. They do not equate to sales but they do give an indication of demand.

“We have never seen shipments in the holiday quarter come in lower than the previous quarter,” said Nabila Popal, research director with IDC’s worldwide tracker team. “However, weakened demand and high inventory caused vendors to cut back drastically on shipments.”

“Heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth,” said Popal. “Vendors are increasingly cautious in their shipments and planning while realigning their focus on profitability.”

“Even Apple, which thus far was seemingly immune, suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China,” noted Popal. “What this holiday quarter tells us is that rising inflation and growing macro concerns continue to stunt consumer spending even more than expected and push out any possible recovery to the very end of 2023.”

Apple iPhone 14, iPhone 14 Plus

Consumer demand

There was a similarly gloomy assessment by Anthony Scarsella, research director with IDC’s worldwide quarterly mobile phone tracker.

“We continue to witness consumer demand dwindle as refresh rates climb past 40 months in most major markets,” said Scarsella. “With 2022 declining more than 11 percent for the year, 2023 is set up to be a year of caution as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory.”

“However, on a positive note, consumers may find even more generous trade-in offers and promotions continuing well into 2023 as the market will think of new methods to drive upgrades and sell more devices, specifically high-end models,” said Scarsella.

Shipments, market share

IDC’s quarterly shipment data also revealed the winners and losers in the depressed smartphone market.

  • Apple is the leading smartphone supplier on a quarterly basis, after shipping 72.3 million units during the fourth quarter, giving it a market share of 24.1 percent.
  • Samsung is second after shipping 58.2 million units in Q4, with a market share of 19.4 percent.
  • Third is Xiaomi shipping 33.2 million units, with a market share of 11 percent.
  • Fourth is Oppo after shipping 25.3 million units, with a market share of 8.4 percent.
  • And in fifth place is Vivo after shipping 22.9 million units, with a market share of 7.6 percent.

However when overall 2022 shipments are considered, the leading smartphone maker are as follows:

  1. Samsung (260.9 shipments in 2022 and 21.6 percent market share);
  2. Apple (226.4 shipments in 2022 and 18.8 percent market share);
  3. Xiaomi (153.1 shipments in 2022 and 12.7 percent market share);
  4. Oppo (103.3 shipments in 2022 and 8.6 percent market share);
  5. Vivo (99 shipments in 2022 and 8.2 percent market share).