Global smartphone shipments decline 18.3% in 4Q22

According to a report from the International Data Corporation (IDC), worldwide smartphone shipments declined 18.3 per cent down to 300.3 million units in the fourth quarter of 2022. This marks the largest-ever quarterly decline and contributes to a 11.3 per cent drop in shipments for the year and the lowest annual shipment since 2013. The report cites weakened consumer demand, inflation, and economic uncertainties as the main reasons for the decline.

The tough close to the year has put the 2.8 per cent recovery expected for 2023 in jeopardy, with heavy downward risk to the forecast.

Research director Nabila Popal of IDC’s Worldwide Tracker team said: “We have never seen shipments in the holiday quarter come in lower than the previous quarter. Heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth. Vendors are increasingly cautious in their shipments and planning while realigning their focus on profitability.”

The report also mentions that consumers are holding onto their devices for longer, with refresh rates climbing past 40 months in most major markets. This is leading to a decrease in consumer demand, and the market is expected to be cautious in 2023 as vendors rethink their portfolio of devices and channels think twice before taking on excess inventory.

“What this holiday quarter tells us is that rising inflation and growing macro concerns continue to stunt consumer spending even more than expected and push out any possible recovery to the very end of 2023.”

Even Apple, which thus far was seemingly immune, suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China.

Anthony Scarsella, research director with IDC’s Worldwide Quarterly Mobile Phone Tracker, said: “2023 is set up to be a year of caution as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory but on a positive note, consumers may find even more generous trade-in offers and promotions continuing well into 2023 as the market will think of new methods to drive upgrades and sell more devices, specifically high-end models.”