Why Did the Smartphone Market Shrink in 2022 Q4?

Smartphone manufacturer shipments fell by up to 17% in the fourth quarter of 2022. Of course, if you look over the full year of shipments you will soon see that they fell by a total of 11%. This resulted in less than 1.2 billion sales, which shows how volatile the market has been this year. So far it looks like it has been a challenging year for vendors and Apple looks to have reclaimed the top spot.

They have come away with the highest market share ever for any quarter. Even though there is shrinking demand, and issues with manufacturing in Zhengzhou, it looks like things are looking up for the company. Samsung finished with a 20% market share and Xiaomi landed in third place. They had their shares fall by over 11% during the fourth quarter and a lot of this resulted in challenges that they faced in India. Vivo and OPPO rounded the top five and they took 10% of the market and 8%.

Vendors have found it very difficult to function given the macroeconomic conditions that took place during this year and the fourth quarter of the year marks the worst performance in over a decade for the sector. The channel seems to be rather cautious when it comes to taking on new inventory and at the end of the day, this has helped to contribute to some of the low shipments. They are being backed by strong incentives and they are also being faced with vendor issues.

Low demand also fuelled the shortage, not to mention that there is a lot of high-end demand This has helped to push the low sales that happened during the end of the year. People wanted higher-end phones and this resulted in fewer sales being made. The year 2021 showed a surging demand and there were also a lot of supply issues that had to be eased as well.

The Rise of Mobile Entertainment and Casinos

So why did 2021 see such a rise in smartphone usage? A lot of this came down to the surge in mobile entertainment. More and more people started to visit new NetEnt casinos because of the new offerings being launched and this resulted in more smartphones being purchased. Of course, you also had the fact that the cost of living was lower. People could afford to spend what they wanted but as time has gone on, things have become more expensive.

As a result of this, vendors are also looking to try and prioritise protecting their market share so that they can then cut costs. Even businesses are being hit by the new reality of financial constraints but at the end of the day, it could be very easy for things to turn around.

The Smartphone Market

The smartphone market is said to experience marginal growth this year. Conditions will probably remain quite tough and through inflation, this will gradually ease. The effects of the recent interest hikes are also quite substantial and this is having an impact on the market more than most people realise.

You also have a lot of economic slowdowns as well as a struggling labour market. This is going to truly limit the market potential as well as impacting how saturated the sector is. The high-end market is being dominated right now and this is especially the case in Northern America and Western Europe. China’s re-opening is going to help improve consumer confidence and on top of this, government stimulus is going to show the effects of this in around 9 months.

China is going to be challenging over the short term and it would seem that some regions are going to grow in the next part of the year. Southeast Asia is said to be seeing some economic growth as well as some recovery. There is going to be a resurgence in tourism too. This is especially the case in China, which is helping to drive a lot of business activity.

Smartphone Manufacturers

Samsung and Apple have looked to retain their leadership in the market, and this just goes to show how strong the companies are and how well they can function, even under the toughest economic conditions. The latest reports show that the company is monitoring shipments by using device markers. Samsung is pushing for that top spot and it will not take a lot for them to overthrow Apple either. Only time will tell what the future for smartphones and entertainment holds but right now, it’s a tough market for the smartphone sector.

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Credited also in Daily Mail and The Mirror.

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