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Smartphone Shipments Suffer Biggest Ever Decline, Slow 2023 Expected

The smartphone market has hit saturation point, with a record fall in shipments driven by inflationary concerns, uncertain global markets, stock glut, and a lack of major updates in the latest generation of devices.

Worldwide smartphone shipments declined a massive 18.3 per cent, year over year, to 300.3 million units in the fourth quarter of 2022, the largest ever drop in a single quarter.

2022 saw an overall fall of 11.3 per cent units compared to 2021, with shipments of 1.21 billion smartphones globally.

This is the lowest annual shipment total since 2013.

According to the International Data Corporation’s Worldwide Quarterly Mobile Phone Tracker, this brutal end to 2022 sales puts the 2.8 per cent recovery expected for 2023 “in serious jeopardy with heavy downward risk to the forecast.”

Anthony Scarsella, research director with IDC, expects “a year of caution,¬†as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory.”

Scarsella notes that refresh rates for phones (the amount of time the average customer will keep a phone before upgrading) have blown out past 40 markets in most major markets around the world.

“We have never seen shipments in the holiday quarter come in lower than the previous quarter,” said Nabila Popal, research director with IDC’s Worldwide Tracker team.

“However, weakened demand and high inventory caused vendors to cut back drastically on shipments.

“Heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth. Vendors are increasingly cautious in their shipments and planning while realigning their focus on profitability.

“Even Apple, which thus far was seemingly immune, suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China.

“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.”

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