Handsets: when the shipments are down!

The aftermath of the Covid crisis, the war in Ukraine, the return of inflation, uncertainty on energy supplies and economic concerns combine together to create a slowdown in demand for mobile phone handsets worldwide. Handsets shipments for 2022 declined to 1.2 billion units, the lowest since 2013. Canalys estimates that global smartphone shipments dropped by 11% across the whole year due to a difficult macroeconomic environment. On a year-on-year basis, Q4/2022 shipments declined by 18%, according to the latest research from Counterpoint Technology Market Research’s Market Monitor service.

In terms of sales, analysts from Counterpoint Technology Market Research estimate that global smartphone revenue and operating profit also saw a decline. The 9% decline in revenue, while lower than in shipments, resulted in annual smartphone revenues amounting to US$ 409 billion (EUR 381 billion), the lowest since 2017, they say. This phenomenon is due to the "premiumization" of the smartphone market, especially under the influence of Apple and Samsung with its foldable smartphones. IDC confirms this trend, as they say the average selling price (ASP) of handsets in 2022 reached US$ 413 (EUR 385), a 6.4% increase vs. the US$ 388 ASP of 2021.

According to IDC, combined shipment figures for the 2022 year show Samsung as the leader with 260.9 million units and a 21.6% market share. Apple was second with 226.4 million and 18.8% of the market while Xiaomi secured 153.1 million shipments and a 12.7% cut of the entire market. Then come Oppo with 103.3 million units (8.6% market share) and Vivo with 99 million units (8.2% market share).

Canalys noted Apple reclaimed the top spot in Q4/2022 with its highest-ever market share of 25% despite manufacturing issues in China. Samsung was second with a 20% market share and Xiaomi remained third on 11%. More globally, shipments from Chinese vendors experienced a double digit drop in Q4/2022. Especially, Vivo and Oppo both registered 21% drops in shipments in Q4/2022, according to Counterpoint Technology Market Research

For 2023, Canalys predicts flat-to-marginal growth this year. Evolution towards premium handsets will persist as 5G continues to expand globally and will account for just over half of smartphones shipped globally in 2022, rising to 80% in 2026, according to IDC.

Smartphones are not the only affected appliances: worldwide shipments of total devices—PCs, tablets, and mobile phones—are projected to decline by 4.4% in 2023, to total 1.7 billion units, according to Gartner. In 2022, the devices shipment market declined 11.9%. Gartner forecasts worldwide smartphone shipments to decline 4% in 2023. Smartphone shipments are projected to total 1.23 billion units in 2023, down from 1.28 billion units in 2022. “Consumers are holding onto their phones longer than expected, from six to nine months, and moving away from fixed to flexible contracts in the absence of meaningful new technology,” said Ranjit Atwal, Senior Director Analyst at Gartner.