Smartphone Shipments Continued to Decline for Third Time in a Row: Reports

Smartphone shipments globally dipped as much as 11 percent year-on-year in the first quarter of 2022, according to reports. This is the third consecutive quarter of annual decline by smartphone volumes in a row — amid component shortages that are impacting supplies in global regions. However, despite the dip in the shipments, Samsung has continued to be the market leader, followed by Apple and Xiaomi. The South Korean giant has even managed to hit its highest global smartphone market share in five years in the last quarter.

According to strategy consulting firm Strategy Analytics, global smartphone shipments dropped 11 percent year-on-year to 314 million units in the first quarter. Ongoing challenges including supply constraints are believed to be the reason impacting smartphone supplies.

"Meanwhile, unfavourable economic conditions, geopolitical issues, as well as COVID-19 disruption (China rolling lockdown etc.) continued to weaken consumers' demand on smartphones and other non-essential products," said Linda Sui, Senior Director at Strategy Analytics, in a prepared statement.

Similar to Strategy Analytics, analyst firm Counterpoint has reported that the global smartphone market declined by seven percent year-on-year, with total shipments of 328 million units in the first quarter. Counterpoint analysts are considering the same reasons for the dip that have been noted by researchers at Strategy Analytics.

Smartphone shipments globally dipped 10.9 percent year-on-year in the first quarter
Photo Credit: Strategy Analytics

Counterpoint also said that the global smartphone market had a seasonal decline of 12 percent quarter-on-quarter in the first quarter. COVID resurgence at the beginning of the quarter and the ongoing Ukraine-Russia conflict are believed to be amongst the key reasons for the decline.

The report released by Strategy Analytics shows that Samsung has continued to lead the market, though its shipments declined 2.7 percent year-on-year to 74.5 million in the third quarter. The company grabbed a share of 23.8 percent, which was its highest first quarter performance by market share since 2017.

Counterpoint's report also shows Samsung as the market leader, though its shipments are said to have dropped three percent year-on-year to 74 million units in the first quarter. The firm said that Samsung was one of only two top-five smartphone brands to come close to its pre-pandemic first quarter shipments.

The reason behind the success of Samsung is believed to be the well-received customer response for the Galaxy S22 models. Counterpoint said that the new flagships helped the company drive a seven percent quarter-on-quarter shipment growth.

After Samsung, Apple has retained its second position in the global smartphone market in the first quarter, with a share of 18.2 percent, Strategy Analytics reports. The company shipped 57 million iPhone units in the quarter and managed to mark a one percent year-on-year growth.

Strategy Analytics also said that Apple captured the highest first quarter market share since 2013.

Counterpoint shows that Apple's shipments in the first quarter remained flat compared to the same quarter last year to 59 million units. The company faced a decline of one percent year-on-year, according to the firm. However, strong demand for the iPhone 13 series and the launch of its 5G-enabled iPhone SE (2022) helped Apple grow its market share to 18 percent in the last quarter from 17 percent in the first quarter of 2021.

Quarterly shipment of Apple also declined 28 percent — primarily due to seasonality — according to Counterpoint.

Unlike Samsung and Apple that both did not face much impact of the overall decline, Chinese brands including Xiaomi, Oppo (comprising both Oppo and OnePlus), and Vivo saw a significant hit — mainly due to the sluggish performance in their home market.

According to Strategy Analytics, Xiaomi shipped 39 million smartphone units in the first quarter that helped capture a share of 12 percent in the global market. However, the market share of the company dropped two percent from 14 percent a year ago.

"Xiaomi suffered from the geopolitical uncertainties in Europe. The China and India market also delivered a mixed bag for the Chinese brand," said Yiwen Wu, Senior Analyst at Strategy Analytics.

The report by Counterpoint also shows that Xiaomi's global smartphone shipments declined by 20 percent year-on-year to 39 million units in the first quarter. The firm also shows a two percent dip in the company's share from 14 percent in the same quarter last year.

Counterpoint believes that the decline in Xiaomi's market performance was caused by the relatively weak performance of the Redmi 9A and Redmi Note 10S smartphones, along with chip shortages. The latter are said to be hurting the Beijing-based company "more severely than other vendors" in the market.

Following Xiaomi, Oppo and Vivo also faced a dip in their shipments. Strategy Analytics shows that Oppo (including OnePlus) captured 10 percent of the global market, while Vivo had eight percent in the first quarter.

Counterpoint's report says that Oppo's shipments declined by 19 percent year-on-year to 31 million units in the last quarter, while Vivo saw a decline of 19 percent year-on-year to 28.6 million units.

Smartphone shipments dipped in the first quarter, though Samsung and Apple continued to lead the market
Photo Credit: Counterpoint

Alongside Xiaomi, Oppo, and Vivo, Counterpoint said that Honor emerged as a strong contender from China. The company that separated from Huawei saw a 148 percent year-on-year growth to 16 million units in the first quarter. It also received a seven percent quarter-on-quarter growth.

Market share of Honor rose to five percent in the quarter, up from four percent in the last quarter and two percent in the same quarter last year, according to Counterpoint.

Realme also managed to grow its shipments by 13 percent year-on-year to 14.5 million units in the first quarter. The company, which is owned by BBK Electronics that also owns Oppo, Vivo, and OnePlus, saw a massive expansion in the overseas market during the quarter, with a 163 percent year-on-year growth in its shipments specifically coming from Europe. However, global shipments of Realme dipped 30 percent quarter-on-quarter.

Realme also emerged as the only brand in the top-five players in India to experience a year-on-year growth of 40 percent in the first quarter, per the Counterpoint report.

Transsion Holdings, which owns Infinix, Tecno, and Itel brands, also continued to grow in the market, with a 23 percent annual growth. This was primarily driven by Infinix, which grew 76 percent year-on-year and four percent quarter-on-quarter, with its shipments increasing in India as well as the rest of Asia Pacific and Middle East and Africa, according to Counterpoint.

Tecno's shipments also increased by 28 percent year-on-year, though Itel saw a three percent dip, the firm said.

According to a forecast made by Strategy Analytics, global smartphone shipments would contract up to two percent year-on-year in the full-year 2022.

"This year will be a tale of two halves. Geopolitical issues, component shortages, price inflation, exchange rate volatility, and COVID disruption will continue to weigh on the smartphone market during the first half of 2022, before the situation eases in the second half due to COVID vaccines, interest rate rises by central banks, and less supply disruption at factories," said Linda Sui, Senior Director at Strategy Analytics.