Omdia’s global smartphone shipments decline year-on-year for eighth consecutive quarter

LONDON, UK – Smartphone shipments totalled 265.9 million units in 2Q23 according to the latest Omdia smartphone preliminary shipment report. Compared to the previous year, this marks a decrease of 9.5%, and compared to the previous quarter, a 1.2% fall. All major smartphone set OEMs, apart from Transsion Holdings and Huawei, saw declines year-on-year. The three largest OEMs, Apple, Samsung and Xiaomi, all saw their shipments fall more than 10% from 2Q22 to 2Q23. 

This is the eighth consecutive quarter of year-on-year decline in overall smartphone shipments. A range of contributing factors have led to the latest results including the recovery period of smartphone demand seen over the COVID-19 pandemic between 4Q20 and 3Q21. But it also is indicative of the range of challenges that have faced the industry and global economy, such as the key component supply issues and shrinking consumer demand in the midst of high inflation.

Samsung had the most shipments in 2Q23, reporting 53.3 million shipments. This is a 11.5% dip from 1Q23, following the release of the S23-series, but more worryingly is a 14.3% fall year-on-year. This result follows the weak demand for mid/low-end smartphones due to the ongoing economic recession, and sales of Samsung's Galaxy A series significantly declining. Despite this, Samsung smartphones maintained its market share of 20%, and its position as the largest player in the smartphone industry.

Apple sees a big quarter-on-quarter fall following a successful 1Q23 for its iPhone 14 series. It recorded 43.2 million shipments, a 24.6% fall from 1Q23 and a 11.7% fall year-on-year from 2Q22. As such, Apple’s market share has fallen back down to its usual level for the second quarter of each year, at 16%. While it previously seemed that Apple was more resilient to the negative down-winds of the economy, it has now begun to feel the squeeze.

“Apple has strong sales of premium models such as the iPhone 14 Pro and Pro Max, while the standard and Plus models sluggish sales compared to their predecessors. Normally, from the second quarter, the standard model should drive up the overall quantity, but this year it is different. Demand for Pro and Pro Max is increasing, especially among high-income consumers.” said Jusy Hong, Senior Research Manager at Omdia.

Xiaomi’s shipments continues to fall globally, falling to 33.2 million, a 15.7% fall year-on-year – from 39.4 million in 2Q22. It still occupies the third spot globally but is facing stiff competition from other Chinese OEMs Oppo and vivo. The weak Indian market remains a problem for Xiaomi, as their biggest market. However, it is further establishing itself in Western Europe, something many other Chinese brands have failed to do.

Oppo Group (including OnePlus) recorded 25.0 million shipments in 1Q23, a fall of 10.5% from the previous year. This fall isn’t as far as Xiaomi’s and as a result, Xiaomi’s lead over Oppo Group has diminished from 11.5 million in 2Q22 to just 8.3 million in 2Q23.

Transsion Holding has recorded a combined total of 24.5 million – a 38.4% increase year-on-year from the 17.7 million shipped in 2Q22. This pushes Transsion Holdings ahead of vivo to be the fifth largest smartphone OEM in 2Q23, coming after a period of long stagnation as it was digesting the inventories from 1Q23. Its efforts to expand into more markets is also proving successful. 

Zaker Li, Omdia Principal Analyst says, ‘The main reason for the increase in shipments was that Transsion completed inventory adjustment in the first quarter this year and increased supply of new products from 2Q. Transsion is targeting the low-end smartphone market in more countries in Asia and Oceania.’ 

Vivo is pushed down into sixth place, despite better results than many of its competitors. It experienced a 10.1% fall in shipments from 24.8 million in 2Q22 to 22.3 million in 2Q23. Despite this it holds a steady market share of 8%, squeezing Xiaomi’s lead over it from 14.6 million in 2Q22 to 10.9 million in 2Q23. Unlike many other Chinese OEMs, vivo is keeping its eyes set on the domestic and APAC market, particularly making strides in the India market, outperforming OPPO.

Honor has recovered from the big dip it saw in 1Q23 as a result of controlling production to digest inventory, seeing 25.9% growth quarter-on-quarter from 11.2 million in 1Q23 to 14.1 million in 2Q23. This is primarily driven by the overseas markets, outpacing Honor’s domestic shipments. Despite this, it is not enough to reach back to its strong 2022 figures. Year-on-year, it is a 6.6% fall, dropping 1-million-unit shipments from the 15.1 million is recorded in 2Q22.

Realme is following a very similar market pattern as Honor, seeing a recovering in shipments from a dip in 1Q23, but not enough to reach levels recorded in 2Q22. It shipped 10.1 million units in 2Q23, up 23.2% from 8.2 million in the first quarter of this year, but still down 24.6% from 2Q22. This recovery comes from digesting inventories, recovering demand in the APAC market and increasing volume from the low-end. Despite this, it remains the ninth largest smartphone OEM, having been overtaken by Motorola in the past quarter. 

“The correlation that Chinese OEMs are experiencing worse market conditions than others is no coincidence. This larger decline is happening within the context of a shrinking domestic market, as well as continued tension with the Indian government, blocking penetration of that market. Realme, in particular, may be hit harder by this due to its product range being primarily in the low-end price tier – and therefore demand being more elastic than OEMs occupying the higher-end of the smartphone market.” said Li. 

The gap between Realme and Motorola has thinned to the tiniest of margins. Motorola shipped just 0.3 million more than Realme in 2Q23 – a total of 10.4 million. This is almost flat quarter-on-quarter but an 18.2% fall from 2Q22.

Huawei is back on the course of recovery after going slightly off-course in the past quarter. It recorded 7.4 million shipments in 2Q23, up 15.6% from the 6.4 million it recorded in both 1Q23 and 2Q22. This comes after seeing two quarters of shrinking shipments in 4Q22 and 1Q23, following a year of growth from 4Q21 to 3Q22. Overall, Huawei is performing well against very tough market conditions and competition. It’s in a much stronger place now versus a year ago, however without the rights to produce smartphones with 5G, there will be a ceiling to this growth.

Hong concludes: “The smartphone industry remains in a slump, and we are expecting the market to contract year-on-year until 3Q23. But there is hope for a recovery in the fourth quarter this year. Apple and Samsung have both faced challenges and have revised their targets down as a result. But these problems will ease come the end of the year and into 2024. Inflation and the resulting squeeze on wage packets and the economy is already easing globally, and high inventory levels is already being tackled by many OEMs. The growing popularity of recycled smartphones is hindering the growth of new smartphone shipments. In particular, it is the main reason for the recent decline in demand in the mid-range smartphone market. Overall shipment forecasts for this year have been revised down over the past several months. However, we expect the smartphone shipments will also recover as the economy recovers.”

Smartphone quarterly result 2Q23

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