the worst market drop in years. What is the reason?
Not so long ago
we wrote about the drop in sales of hard drives
, processors and other components and systems. Among the largest vendors of chips, for example, there is a very strong drop in revenue. In addition, PC sales continue to fall.
Not surprisingly, not everything is rosy for smartphone manufacturers. In fact, they are even worse. What happened, how difficult is everything and what are the reasons for this situation? We’ll talk about this today.
Is there nowhere to fall below?
Smartphone sales have steadily increased over the years. When it is very active, when it is a little more modest. Still, the fact remains that the growth was noticeable. And now the backlash has come – sales are falling. According to experts from the analytical agency IDC, this fall is the strongest in the history of the smartphone market itself.
In IDC, the date of the emergence of such a market is considered the announcement of the first iPhone model from Apple and the release of this device in 2007. So, according to the agency, in the fourth quarter of 2022, vendors shipped about 300 million smartphones. This is a lot, but when compared with the same period in 2021, the drop is very significant – 18.3%. Not a joke to say the least.
If we take the whole year, and not just the fourth quarter, then the drop here is not so strong, but still noticeable – 11.3%. In total, in 2022, vendors shipped 1.2 billion smart phones. All this gives analysts a reason to say that the final results of shipments of smartphones in 2022 are the lowest in the last 10 years. Perhaps, experts say, there is still room for growth. But it is insignificant, in addition, in the most optimistic forecasts, the positive dynamics does not exceed 2-3%.
To make matters worse, Q4 smartphone sales usually go up, not down. After all, this is the period of holidays, which means that smartphones, TVs, laptops and other equipment are massively bought. And it has always been so – until 2022, which became an exception to the rule. Here tablewhich shows smartphone sales dynamics.
What about individual companies?
The market situation is more or less clear, if you look at it in general. But what about individual manufacturers? It’s all a bit of a mess here. Chinese companies have suffered the most, with a 20% or more decline year on year.
For example, the Chinese company Xiaomi was able to sell about 153 million smartphones in a year. Last year, this figure was 191 million.
Apple, in general, is doing well, but still it also sold fewer smartphones. The dynamics is negative from year to year, and it is about 4%.
You may also be interested in these texts:
→ Do you need changes in the work of the team? We calculate the answer using the Glacher formula
→ What to do in 2023? Pet Project Ideas and Professional Development Toolkit
→ Hyperscaling in 2023: what we did to support our clients’ business
Samsung sold 260.9 million devices instead of 272.1 million, which is last year’s figure. However, the company’s overall market share increased from 20% to 21.6%, which is not so bad.
But the worst of all feel, except for Xiaomi, the Chinese companies Oppo and Vivo from the BBK holding. They have a very strong drawdown in both market share and sales.
What is the reason for this situation? The main problem is the current geopolitical situation. People are starting to save on electronics, preferring to cut costs or solve other problems. Many people prefer to buy used equipment, rather than new devices.
Used devices are becoming very popular. On the one hand, this is good, because there is less electronic waste. On the other hand, suppliers of electronic devices suffer, if not losses, then a strong reduction in profits, which, of course, affects the overall development of the industry.
But, in general, while this situation is not fatal for the industry. It still affects the fact that many of us bought electronic devices “in reserve” during the pandemic. Therefore, now the issue of updating devices is not worth the edge. Well, a little later – everything is possible, so it remains to wait a bit to understand whether the market will fall further or recovery will begin.
