The smartphone market is declining, and no one can stop this. According to the latest report from Canalys, in Q3 2022, the niche recorded its third consecutive decline. Now, the market has dropped 9% year-on-year, marking the worst Q3 since 2014.
There are many reasons behind this. However, the biggest factor is not directly related to the segment. There is price inflation everywhere. So people have to delay purchasing electronic hardware and prioritize another essential spending. If nothing else, this situation will continue for the next six to nine months, impacting the smartphone market as well.
Anyway, Samsung still remains the world’s first smartphone maker, with a 22% market share. The South Korean company is still able to keep its leading position due to heavy promotions to reduce channel inventory. Though Apple was in the second position like the previous quarters, it’s the only OEM to record positive growth. Now, its market share is 18%, further shortening the gap with Samsung. The rest of the positions in the top five belong to Xiaomi, OPPO, and VIVO. They have market shares of 14%, 10%, and 9%, respectively.
“The smartphone market is highly reactive to consumer demand and vendors are adjusting quickly to the harsh business conditions,” said Canalys Analyst Amber Liu. “For most vendors, the priority is to reduce the risk of inventory building up given deteriorating demand. Vendors had significant stockpiles going into July, but sell-through gradually improved from September owing to aggressive discounting and promotions. The pricing strategy of new products is cautiously crafted, even for Apple, to avoid significant pushback from consumers who now tend to be very sensitive to any price hike,” added Liu.
“As demand shows no signs of improvement moving into Q4 and H1 2023, vendors have to work on a prudent production forecast with the supply chain while working closely with the channel to stabilize market share,” said Canalys Analyst Sanyam Chaurasia. “Going into the sales season, consumers who have been delaying purchases will expect steep discounts and bundling promotions as well as significant price reductions on older generation devices. Compared to the strong demand period of the previous year, a slow but steady festive sale is anticipated in Q4 2022. However, it will be too soon to see the upcoming Q4 as the real turning point of market recovery.”
