Smartphones dropped 11% in ’22, recovery due in late ‘23

Smartphone shipments globally dropped 18% for the fourth quarter and were down 11% for all of 2022, the lowest level since 2013, in a dramatic preview of a slow 2023, according to IDC.

Weakened demand for smartphones and high inventory caused smartphone vendors to cut back “drastically” on shipments in the final quarter of 2022, said Nabila Popal, IDC research director.

“Even Apple, which thus far was seemingly immune, suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China,” Popal said. “What this holiday quarter tells us is that rising inflation and growing macro concerns continue to stunt consumer spending even more than expected and push out any possible recovery to the very end of 2023.”

Apple led fourth quarter shipments but still saw a 15% decline over a year earlier, while Samsung saw a 15.6% decline and Xiaomi declined 26%, according to IDC data.

For all of 2022, Samsung finished on top with 261 million smartphones shipped and 21% market share, but that was still a 4% decline from 2021.

Apple finished 2022 in second with 226 million iPhones shipped and 19% market share, a decline of 4% from 2021.

Xiaomi took a far bigger percentage decline in 2022 and was down nearly 20% over 2021, with 153 million smartphones shipped or nearly 13% of the market.

IDC said 1.2 billion smartphones shipped in 2022, a drop of 11.3% over the 1.359 billion shipped in 2021.

Demand for smartphones has dwindled with buyers refreshing their phones at rates of more than 40 months in most major markets, IDC said. “2023 is set up to be a year of caution as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory,” said Anthony Scarsella, IDC research director.

Inventory corrections are hitting most sectors of electronics, leading global semiconductor analysts and the World Semiconductor Trade Statistics organization to predict a 4% decline revenues for all 2023.

Texas Instruments on Tuesday cited weaker demand in all end markets with the exception of automotive for the fourth quarter and company officials said the trend is expected to continue in the current quarter.   Sales of chips into the automotive sector are expected to be a bright spot across various chipmakers, even as some automakers still see shortages in certain chips.

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