Bad news about smartphone shipments has become the norm, rather than the exception, in recent years. The trend pre-dates the pandemic, but has only accelerated during the pandemic, thanks to various economic and supply chain impacts. Even so, a high single-digit drop warrants examination and some difficult questions around the industry’s health.
New figures out this morning from Canalys show a 9% year-over-year drop for global smartphone shipments in Q2. The culprits are, well, pretty much everything you’ve been hearing about for the last couple of years.
Says analyst Runar Bjørhovde:
Vendors were forced to review their tactics in Q2 as the outlook for the smartphone market became more cautious. Economic headwinds, sluggish demand and inventory pileup have resulted in vendors rapidly reassessing their portfolio strategies for the rest of 2022. The oversupplied mid-range is an exposed segment for vendors to focus on adjusting new launches, as budget-constrained consumers shift their device purchases toward the lower end.
Image Credits: Canalys
Consumers have broadly slowed down their upgrade cycles, as phones have gotten better and more robust. The phones themselves have grown more expensive in the process, adding an air of consumer caution amid economic uncertainty, including unemployment and inflation. Add to that chip shortages and supply chain bottlenecks, and you’ve got a recipe for an industry that has crashed back down to earth.
Given all of the above, it ought to come as little surprise that low-end and mid-tier devices have been driving what purchases remain. Most notable is Samsung’s A-series, which helped the company retain the top spot and grow its overall market share from 18 to 21%. Apple and Xiaomi effectively swapped market shares with 17 and 14% this quarter, as Apple took second place, propelled by demand for the iPhone 13.
Along with Xiaomi, fellow Chinese handset makers Oppo and Vivo also experienced market share drops for the quarter, at 1% apiece.
Smartphone shipments dropped 9% in Q2
Архив рубрики: canalys
Smartphone shipments dropped 13% globally, and COVID-19 is to blame
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We knew it was going to be bad — but not necessarily “lowest level since 2013” bad. As Apple was busy reporting its earnings, Canalys just dropped some of its own figures — and they’re not pretty. After two quarters of much-needed growing, the global smartphone market just took a big hit. And you no doubt already know who the culprit is.
The mobile industry joins countless others that have taken a massive hit due to the COVID-19 pandemic, with shipments dropping 13% from this time last year. Here’s a graph for those of you who are visual learners:
Analyst Ben Stanton used the word “crushed” to describe the novel coronavirus’s impact on the mobile market. “In February, when the coronavirus was centered on China, vendors were mainly concerned about how to build enough smartphones to meet global demand,” he writes. “But in March, the situation flipped on its head. Smartphone manufacturing has now recovered, but as half the world entered lockdown, sales plummeted.”
First it was impact on the global supply chain, which is centered in Asia, along with a drop in demand among consumers in China. As Europe, the U.S. and other locations continue to live under shelter in place orders, demand in those markets has taken a significant hit. People are stuck inside and many have lost jobs — it’s not really the ideal time to consider shelling out $1,000+ for what still seems a luxury for many.
Samsung regained the top spot, while still losing significant numbers. Both it and the number two company, Huawei, were down 17% for the quarter. Apple, at number three, dropped 8%. Chinese manufacturers Xiaomi and Vivo saw some gains, at 9% and 3%, respectively.
There are bound to be rough times ahead as well. Per Stanton, “Most smartphone companies expect Q2 to represent the peak of the coronavirus’ impact.” Apple noted the uncertainty of its own earnings by opting not to issue guidance for next quarter.
Smartphone shipments dropped 13% globally, and COVID-19 is to blame