In May, less than 100 million smartphones were sold worldwide. A market recession that is confirmed with the shortage of components, factory closures in China and the war in Ukraine.
The smartphone market is in decline and has just fallen below the symbolic bar of 100 million units sold last May. A recession which is confirmed with a market down 4% compared to April and 10% compared to last year at the same period. If the Covid had not helped in 2020 and 2021, the problem is different today.
The peak of 2016 is behind us
According to a Counterpoint Research report, smartphone sales peaked in December 2016, the only month when the market reached 150 million units sold worldwide. Since then, we can think that consumers are mostly equipped and that potential customers are not very numerous. We have moved from a conquest market to a renewal market, which makes it more dependent on the economic context.
For Tarun Pathak, director of research at Counterpoint Research, the decline in unit sales is related to “inflationary pressures”, which make consumers living in developed countries postpone this purchase, which mainly acts as a replacement for a newer model. But this also affects emerging countries, where consumers are likely to “wait for seasonal promotions before buying to offset some of the cost pressures“.
The declining Chinese market and the war in Ukraine
The lead analyst for this study, Varun Mishra, said that “China’s lockdowns and protracted economic slowdown have hurt domestic demand and undermined the global supply chain“. While the Chinese market did not experience a decline between April and May 2022, it reduced by 17% compared to May 2021.
The other cause given is the Russian-Ukrainian crisis, “which penalizes demand in Eastern Europeand adds uncertainty. The smartphone market is shaken and no manufacturer seems spared by this geopolitical context, although Realme is experiencing strong growth in France, while Xiaomi is losing market share in Europe. In addition, some manufacturers find themselves with large stocks of smartphones, for example Samsung would have 50 million on their hands.
Counterpoint Research expects the market recession to continue through the summer, but its condition is expected to improve in the second half of 2022. Sales may pick up.”due to a more normalized situation in China, a continuous improvement in the supply-demand balance […] and better macroeconomic conditions“.
Especially since in this second part of the year, we should discover the Samsung Galaxy Z Fold 4 and Galaxy Z Flip 4 or even the iPhone 14, which are still very popular.
To follow us, we invite you to download our Android and iOS application. You can read our articles, files, and watch our latest YouTube videos.