Research firm Canalys reports that the worldwide smartphone shipments have fallen 9% year-on-year in Q2 2022. The 9% drop has been attributed to a drop in demand as a result of economic headwinds and regional uncertainty.
In terms of market share, the Galaxy A series ensured Samsung secured the top spot with a 21% share, while Apple sits second at 17%, thanks to the iPhone 13 remaining in high demand.
The Chinese brands, however, took the biggest hits with Xiaomi, Oppo and vivo struggling and losing market share. They currently sit at 14%, 10% and 9% respectively, down from 17%, 11% and 10% in Q2 2021.
Runar Bjørhovde, one of the researchers at Canalys says that the sluggish demand and the resultant inventory pileup have forced vendors to reassess their portfolio strategies for the rest of 2022.
He believes that the most sensitive segment at the moment is the middle range, where it is currently oversupplied. He states that buyers currently being affected by the hard economic times are forced to purchase devices in the lower end bracket where in the past they could afford to spend money in the middle range tier.
Toby Zhu, another researcher at Canalys also mentions concerns within logistics and production. Zhu explains that despite component supplies and cost pressures easing, some emerging markets have tightened import laws and customs procedures, which have resulted in shipment delays.
The onus is now on manufacturers to lure customers into buying new devices through promotions and offers ahead of new launches, normally done just before the holiday season kicks in.
The slowdown in 2020 as a result of COVID-19 lockdowns meant that 2021 had more demand carried over from the previous year. This is a stark contrast to 2022 where increasing inflation has reduced the amount of money normal consumers are left with to splurge on new electronics after covering their basic needs.
It seems like the situation will not improve in the remaining quarters of the year, with the smartphone market marking a noticeable drop, especially in the midrange segment.
Whether this will change how OEMs approach the rest of the year will be interesting to see, as, at the moment, the high-end market seems unaffected with the Galaxy foldables and the iPhone 13 maintaining their expected sales.
We can only hope that the high inflation is curbed, and other regional uncertainties like the Russia-Ukraine conflict are dealt with, then we can have a chance of the industry going to what it was before the Covid-19 pandemic struck.