Friday, April 19, 2024

Smartphone shipments suffer largest decline with 11.3% drop in 2022

Worldwide smartphone shipments declined 18.3% year over year to 300.3 million units in the fourth quarter of 2022 (4Q22), according to research firm IDC.

The drop marks the largest-ever decline in a single quarter and contributed to a steep 11.3% decline for the year.

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.

The tough close to the year puts the 2.8% recovery expected for 2023 in serious jeopardy with heavy downward risk to the forecast.

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

“Heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth. 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.

“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.”

Anthony Scarsella, research director with IDC’s Worldwide Quarterly Mobile Phone Tracker, said the market continues to witness consumer demand dwindle as refresh rates climb past 40 months in most major markets.

“With 2022 declining more than 11% 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,” Scarsella said.

“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.”

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