Counterpoint: Global Smartphone Market at Lowest Q3 Level Since 2014

The global smartphone market remained under pressure given deteriorating economic conditions with shipments declining by 12% year-on-year, reaching 301 million units in 3Q22, according to Counterpoint Research. Ongoing international political tensions resulting in economic uncertainty hit the smartphone market even though it reversed its slide below the 300-million-mark last quarter thanks to a slight quarterly recovery in Apple and Samsung shipments.

“Most major vendors continued experiencing annual shipment declines in the third quarter of 2022. Russia’s escalating war in Ukraine, ongoing China-US political distrust and tensions, growing inflationary pressures across regions, a growing fear of recession, and weakening national currencies all caused a further dent in consumer sentiment, hitting already weakened demand. This is also adding to a slow but sustained lengthening of smartphone replacement cycles with smartphones becoming more durable as technological advancement slows. This is accompanying, and to a smaller degree advancing, a fall in the shipments of mid and lower-end smartphones, even as the premium segment weathers the economic storm better. Consequently, and thanks to an earlier launch of the latest iPhone series this year, Apple emerged as the only top-five smartphone vendor to manage annual shipment growth in the quarter,“ said Harmeet Singh Walia, Senior Analyst at Counterpoint.

While Samsung grew QoQ in 3Q22 thanks to record presales of its premium fold and flip smartphones, compared with the same quarter last year, however, its shipments fell by 8% YoY. This is primarily down to dampening consumer sentiment in several of its key markets. This also affected top Chinese brands, whose shipments remained low compared with last year as they were getting rid of excess inventory and at the same time managing a slowdown in the home market, China. However, they were able to capitalize on Apple and Samsung’s exit from the Russian market, in which their share increased substantially.

“With the full force of the latest iPhone launch being felt in Q4, we expect further quarterly improvement in the coming quarter, although central banks’ attempts to control inflation will further reduce consumer demand. The channel inventory is still higher, and the OEMs will focus on getting rid of excess inventory in Q4 as well. Hence, shipments are unlikely to reach last year’s levels, let alone pre-pandemic Q4 levels of over 400 million units. Looking further ahead into 2023, we expect sluggish demand with lengthening replacement rates, especially in the first half of the year,“ said Jan Stryjak, Associate Director at Counterpoint.