The good old days of the smartphone market are gone, and the market is continuing its decline. In fact, it's the fifth consecutive quarter the market is down. The report cites data from Canalys, a market research firm, which shows that smartphone shipments fell by 12% year-on-year in the first quarter of 2023, reaching 272 million units.
Let's be clear, the smartphone market as a whole is not in any particular danger. People are still attached to their smartphones, more than ever. However, the days of people rolling through smartphones yearly has gone, while the industry is not the tech darling anymore. Smartphone websites – which were once attracting millions of views – are seeing impressions fall way down.
Canalys attributes the decline in the market to several factors, such as supply chain constraints, geopolitical uncertainty, weak consumer demand, and high prices. The report also notes that the market recovery has been pushed back to 2024, as the impact of the COVID-19 pandemic continues to linger.
Samsung is still the dominant player, leading the market as the only vendor to increase its market share. Samsung grew in Q1 2023, reaching 23%, up from 21% a year ago. Although, shipments were down, with the company shipping 63 million units, a 3% decline from Q1 2022. Apple came in second with a 21% market share, down from 23% in Q1 2022. The iPhone maker shipped 59 million units, a 1% decline from Q1 2022.
The report states that Apple's performance was affected by the delayed launch of its iPhone 14 series, which arrived in late October instead of September. However, the iPhone 14 Pro models were well received by consumers and helped Apple maintain its premium position in the market.
Changing Market Conditions Means Cheaper Phones
The Chinese vendors Xiaomi, OPPO, and vivo rounded up the top five, with market shares of 15%, 13%, and 11%, respectively. However, all three suffered double-digit declines in shipments due to component shortages and competition from Samsung and Apple. Xiaomi shipped 41 million units, down by 17% year-on-year; OPPO shipped 36 million units, down by 18%; and Vivo shipped 30 million units, down by 19%.
While the market decline may cause concerns to manufacturers, consumers can view it as a positive. Canalys reports that the average selling price of smartphones will drop from $415 in 2022 to $376 through 2027. This is because vendors will seek to attract customers. For those of us who remember the days when flagships were $500 – $700, hopefully, the days of $1500 phones will become a thing of the past.
The report concludes that the global smartphone market will face more challenges and uncertainties in the coming quarters, but also expresses optimism that the market will bounce back to growth in 2024.
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