Smartphone Shipments Decline 9 Percent in 2Q22

The global smartphone market took a further dip in the second quarter of 2022, with shipments declining by 9% year-on-year to reach 294.5 million units, according to Counterpoint Research. Deteriorating economic conditions were exacerbated by ongoing geopolitical uncertainty caused by the war in Ukraine, weakening an industry that hadn’t yet fully recovered from the COVID-19 pandemic and chip shortages.

“The second quarter of 2022 proved challenging for the global smartphone market, with most vendors recording year-on-year shipment declines. Samsung was the only top-five vendor that managed to grow over the year, although this was largely due to 2Q21 being a particularly poor quarter for Samsung thanks to COVID-related production issues, especially at its Vietnam factory. Nevertheless, Samsung retained the top spot, growing 8% year on year and gaining three percentage points of market share to 21%. Apple experienced a relatively small decline of 5% year-on-year due to macroeconomic headwinds, particularly in China. Shipments of Xiaomi, OPPO, and vivo, however, fell by 25%, 15%, and 22% respectively,“ said Jan Stryjak, Associate Director at Counterpoint Research.

These top Chinese brands - facing lockdowns in China on top of a global economic slowdown - were hit particularly hard as the Chinese market fell to its lowest level in almost a decade. At the same time, they are being challenged more aggressively at home by a strengthened HONOR, while Huawei has also begun showing signs of recovery thanks to the trust that it still enjoys among Chinese smartphone users.

“Outside the top five, there was also a mixed bag of results. But the clear winner was HONOR, which became the sixth largest smartphone vendor globally (from eighth in 2Q21) with year-on-year shipment growth of 79%. This is primarily due to the re-establishment of the brand’s relationships with component players. Transsion Group’s brands TECNO and Infinix also posted shipment growth of 2% and 16% respectively over the year. Offering phones with enhanced design and improved specs paid dividends, as did their strategy to continue incentivizing distributors while few other brands are doing so,“ said Harmeet Singh Walia, Senior Analyst at Counterpoint Research.

Looking ahead, the challenges are likely to continue for the rest of the year. A pessimistic economic growth outlook with many countries on the brink of recession, ongoing and prolonged geopolitical uncertainty, rising commodity prices, and weakening consumer demand for tech products are all impediments to the smartphone industry’s post-COVID recovery.