Canalys predicts tough conditions for global smartphone market as shipments plunges 11% in 2022

By Onome Amuge

Market analysts at  leading global technology market analysis firm,Canalys, have predicted tough conditions for vendors and other stakeholders in the global smartphone market in 2023 as the industry was adversely impacted by market disruptions in 2022, leading to its worst performance in a decade.

According to Canalys research, the global smartphone market suffered a decline in the fourth quarter of 2022 as economic headwinds impacted smartphone shipments which dropped 17 per cent year-on-year, while full year shipments plunged by 11 per cent to fewer than 1.2 billion,

Commenting on the quarterly market data, Runar Bjorhovde, Canalys research analyst, explained that smartphone vendors have struggled in a difficult macroeconomic environment throughout 2022. Q4 2022, according to Bjorhovde, marks the worst annual and Q4 performance in a decade.

Giving a further analysis of the market, the senior research analyst said; “The channel is highly cautious with taking on new inventory, contributing to low shipments in Q4. Backed by strong promotional incentives from vendors and channels, the holiday sales season helped reduce inventory levels. While low-to-mid-range demand fell fast in previous quarters, high-end demand began to show weakness in Q4. The market’s performance in Q4 2022 stands in stark contrast to Q4 2021, which saw surging demand and easing supply issues.”

Le Xuan Chiew, another analyst at the leading global technology market analysis firm, projected that vendors will approach 2023 cautiously, prioritizing profitability and protecting market share.

“Vendors are cutting costs to adapt to the new market reality. Building strong partnerships with the channel will be important for protecting market shares as difficult market conditions for both channel partners and vendors can easily lead to strenuous negotiations,” he added.

Based on the report, Canalys forecasts flat to marginal growth for the smartphone market in 2023, with conditions expected to remain tough.

Dwelling on this, Chiew noted that though inflationary pressures will gradually ease  during the year, the effects of interest rate hikes, economic slowdowns and an increasingly struggling labor market will limit the market’s potential.

On a positive note, the research company noted that Apple reclaimed the top spot in Q4 2022 and achieved its highest quarterly market share ever at 25 per cent, despite being struck by shrinking demand and manufacturing issues in the iPhone Zhengzhou factory in China.

The report also showed that Samsung finished the quarter in second spot with a 20 per cent market share but emerged the largest vendor for the full year.

Meanwhile, Xiaomi retained third place despite a decline in its share to 11 per cent  during the period under review,attributed to market disruptions in top consumer India. OPPO and vivo completed the top five positions with 10 per cent and 8 per cent  market shares respectively.