According to a recent survey, the global smartphone industry will pick up steam in the second half of 2023 as channel stocks stabilize.
By the middle of 2023, shipments will stabilize around the levels from 2022, predicts market research firm Canalys.
Research researcher Lucas Zhong has stated, “Decline rates will start to improve soon, though this is more connected to the stark contrast between 2022 and 2023 shrinking.”
Vendors are approaching the market cautiously, prioritizing lean operations, profitability goals, and inventory clearing, as per the study.
In Q1 2023, the total number of smartphones shipped globally decreased by 13% to 269.8 million devices.
Samsung recaptured first place and shipped 60.3 million units due to an updated product lineup.
In second place with 58 million units was Apple. It had a significant 21% market share because it was the only vendor among the top five to grow year over year.
With 30.5 million sales, Xiaomi maintained its third-place ranking. Vivo and OPPO shipped 26.6 million and 20.9 million devices to round out the top five and capture 10% and 8% of the market, respectively.
After having a brutal end to 2022, Samsung’s performance “shows early signs of recovery,” according to Canalys analyst Runar Bjorhovde.
“Product introductions, which increased sell-in volume, were a critical factor in the resurgence. Still, the future will present challenges for Samsung, particularly given the high inventory of entry-level devices,” Bjorhovde said.
After experiencing significant decreases in 2022, the mid-range pricing sector has rebounded.
However, Zhong predicted that “mid-range demand in 2023 will remain constrained due to macroeconomic difficulties and a lack of differentiators within this price band.”
Meanwhile, worldwide smartphone shipments declined 14.6% year over year to 268.6 million units in the first quarter of 2023 (1Q23), according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker.
This IDC data confirm the seventh consecutive quarter of decline in the smartphone market as the sector continues to struggle with lukewarm demand, inflation, and macro uncertainties.
While the decline is more than the 12.7% IDC previously forecasted, the results reflect that inventory has remained elevated across regions. However, it is in significantly better shape compared to six months ago thanks to reduced shipments and heavy promotional activities.
“The industry is going through a period of inventory clearing and adjustment. Market players remain cautious deploying a conservative approach rather than dumping more stock into the channel to chase temporary gains in share. I think it is the smart thing to do if we want to avoid an unhealthy situation like 2022,” said Nabila Popal, research director with IDC’s Worldwide Tracker team.
“While we are optimistic about recovery by the end of the year, we still have a tough 3-6 months ahead. Everyone is anxious about exactly when the tide will turn and wants to be first to ride the wave of recovery. However, it’s a tricky situation. Anyone who jumps in too soon will drown in excess inventory. Now more than ever, it’s important to keep a close pulse of the market. Barring unforeseen elements, IDC expects the market to cross into positive territory in the third quarter and see healthy double-digit growth by the holiday quarter,” the official stated further.