Global smartphone market dips 12% in Q1

The global smartphone market continud its downward trend for fifth consecutive quarter, dropping 12 percent year-on-year in Q1, according to Canalys.

Samsung snagged the pole position with 22 percent market share, just one percent ahead of Apple, which slid to second. Xiaomi is next with 11 percent market share, followed by Oppo and Vivo at 10 and 8 percent respectively.

According to Sanyam Chaurasia, Analyst of Canalys, the smartphone market’s decline in the first quarter of 2023 was within expectations throughout the industry.

“The local macroeconomic conditions continued to hinder vendors’ investments and operations in several markets. Despite price cuts and heavy promotions from vendors, consumer demand remained sluggish, particularly in the low-end segment due to high inflation affecting consumer confidence and spending. Additionally, the continuous sluggish end-user demand has triggered a major wave of destocking across the entire supply chain, with channels reducing inventory levels to secure operations. To maintain a low level of sell-in volume, vendors continued to use cautious production techniques, which had a long-term negative impact on the component supply chain’s operational performance,” he said.

There may be a sliver of hope in the coming quarters.

“There have been improvements in demand for certain smartphone products and price bands. Furthermore, some smartphone vendors are becoming more active in production planning and ordering components,” said Toby Zhu, Analyst of Canalys.

Canalys predicts that the inventory of the smartphone industry, irrespective of channel or vendor, can reach a relatively healthy level by the end of the second quarter of 2023.

“It is still too early to predict the recovery of overall consumer demand. However, the sell-in volume of the global smartphone market is expected to improve due to the reduction in inventories in the next few quarters. In addition, vendors have focused more on innovations and raising production and channel efficiencies after a round of fluctuations, shifting from growing for volumes and shares to growing for quality. 5G popularisation and foldable phones are also becoming the new driving forces in the industry,” said Zhu.

Photo: Oppo