Global smartphone market takes ‘turn for the worse’ in Q1

The global smartphone market fell more than expected in the three months to March 2022, dropping by 8.9 per cent year-on-year.

This is according to research firm IDC, which said the first quarter of 2022 was the third consecutive quarter to record a decline, with shipments falling to 314.1 million units – 3.5 per cent lower than its initial February forecast.

"Although some decline was expected in Q1, due to the ongoing supply and logistical challenges and a difficult year-over-year comparison, things seemed to have taken a turn for the worse," said Nabila Popal, research director at IDC.

"Consumer sentiment across all regions, and especially China, is broadly negative with heavy concerns around inflation and economic instability that have dampened consumer spending. This is now coupled with the rising costs of components and transportation and the recent lockdowns in Shanghai, which are exacerbating an already difficult situation.

“On top of all this is the Russian invasion of Ukraine, which immediately impacted that region and continues on an unknown trajectory. Given all these uncertainties, most OEMs [original equipment manufacturer] are adopting a more conservative growth strategy for 2022."

The Asia Pacific region, including China, dragged global volumes down more than any other region, which accounted for nearly half of all shipments worldwide, with a decline of a combined 12.3 per cent during the period.

"It goes without saying that the world continues to face numerous challenges, whether it be geopolitical, pandemic related, or macroeconomic," said Ryan Reith, group vice president with IDC's Worldwide Mobile Device Trackers.

"Almost everything that’s happened in recent months has been a headwind on the smartphone market and realistically many other technology segments.

“Our research tells us Samsung and Apple have navigated the supply chain situation a bit better than their competitors and as a result we have seen reduced orders from the next set of top OEMs.

“We remain of the opinion that any diminished demand will not be lost, but rather pushed forward. It's just a matter of when that demand resumes."

Samsung maintained its lead in the top vendor rankings, with 23.4 per cent market share – its largest quarterly share since 2018 – and 73.6 million units shipped.

Coming in second was Apple with 18 per cent share and 55.3 million units shipped, followed by Xiaomi with 12.7 per cent share and 48.6 million units shipped, OPPO with 8.7 per cent share and 37.5 million units shipped and vivo with 8.1 per cent share and 35 million units shipped.

The slowdown in growth for smartphones, as well as PCs and server end markets is expected to have a knock-on effect on the growth of semiconducter revenue, according to fellow research firm Gartner, with it forecasting a rise of 13.6 per cent to US$676 billion by the end of 2022.