I can still remember the days of thousands of people lining up to purchase the newest smartphone from whatever brand they’re loyal to. That goes not just for Apple who has set the most obvious example over the years, but also Samsung, Huawei, and even OnePlus. There used to be a certain energy around new smartphones, one that made buying one an inescapable decision once your heart was set on it. Nowadays, it’s extremely rare to find that same overzealous enthusiasm around upgraded devices, and that coupled with the effects of the past three years has resulted in the worst year for the market since 2013.
International Data Corporation (IDC) regularly publishes data on market trends, including the smartphone market, and its report covering Q4 2022 is pretty fascinating. According to IDC, that was the quarter that saw the “largest-ever decline in a single quarter,” with an 18.3 percent decline year-over-year. That resulted in 300.3 million phones sold in the fourth quarter of 2022, with 1.21 billion units shipping throughout the year. It’s the lowest volume since 2013, when smartphones were still in a stage of infancy.
“We have never seen shipments in the holiday quarter come in lower than the previous quarter,” said Kabila Popal, research director with the Worldwide Tracker team at IDC. “However, weakened demand and high inventory caused vendors to cut back drastically on shipments.
No one was safe from the negative effects of the market last quarter, including Apple and Samsung who suffered 14.9 percent and 15.6 percent shipment declines, respectively. And despite all of the sales, discounts, and promotions over the holidays, it wasn’t enough to promote positive growth for the market.
“Heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth,” said Popal. “Vendors are increasingly cautious in their shipments and planning while realigning their focus on profitability.”
Does this mean the smartphone is dead? By no means. Smartphone innovation has hit something of a plateau as companies contemplate with finding new ways to innovate. The traditional smartphone form factor – a brick-like shape with a thin body and a screen on the front – feels stale and dated compared to devices like Samsung’s Galaxy Z Fold 4 and Oppo’s Find N2, which boast foldable screens and much more versatile form factors.
But while that sector of the smartphone market has yet to connect with consumers like brick-shaped phones have, the bricks we all carry will continue to age for longer periods of time until there’s a compelling reason to upgrade. One of the biggest reasons no one buys a new phone is because often, new ones look and feel just like old ones, an impression no processor upgrade or fourth rear camera lens can seem to dissipate.
2023 was projected to see a 2.3 percent growth in smartphone sales, although with the news of how poorly Q4 2022 performed, it’s hard to say whether the industry will get back on track. At least in the first half of the year, we’re not expecting a ton of groundbreaking announcements, with Samsung expected to unveil a Galaxy S23 series eerily similar to last year’s S22 lineup and Google toying with the idea of releasing its first foldable in May.
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