According to the latest research report released by Counterpoint’s market monitoring service, even though shipments in the fourth quarter of 2022 will increase by 1% quarter-on-quarter to 303.9 million units, they will decline by 18% year-on-year, indicating that the global smartphone market is still under great pressure. Cargo volumes were the lowest for the fourth quarter since 2013. Full-year shipments in 2022 also fell to 1.2 billion units, the worst annual performance since 2013.
Commenting on the overall market movement, senior analyst Harmeet Singh Walia said: “In 2022, the war in Ukraine, inflationary pressures, economic uncertainty and macroeconomic headwinds have affected consumer sentiment and the frequency of purchases by smartphone users. The cost of living crisis, The smartphone market is still not out of the woods in the fourth quarter of 2022 due to labor market shortages and declining consumer purchasing power, leading to double-digit declines in shipments from the top five smartphone vendors.”
Affected by shipments, global smartphone revenue and operating profit also declined, but the decline was less than the decline in shipments. Major OEMs have enriched their premium handset product portfolios, driving overall average selling price (ASP) growth of 5% YoY in 2022. The 9% decline in revenue brought full-year smartphone revenue down to $409 billion, the lowest level since 2017. Apple recorded a 1% growth to recover from a larger decline, becoming the only brand among the top five smartphone OEMs to achieve growth.
Jeff Fieldhack, research director, commented on Apple’s performance: “Thanks to its mature management model of production problems, Apple is stronger than other major smartphone manufacturers and can more safely weather the impact of economic and geopolitical turmoil. One year. Its iPhone Pro series is still selling well, and if it is not for the production interruption caused by the new crown epidemic in Zhengzhou Park, which produces most of the Pro series, the shipment of some Pro series has been postponed until January. The share could be higher.”
The company’s shipments, revenue and operating profit in the fourth quarter of 2022 will therefore record year-on-year declines. However, unlike the struggling smartphone market, it has outperformed in terms of growth in shipments, revenue, and operating profit, and will reach historically high shares of 18%, 48%, and 85%, respectively, in 2022.
The high-end market is Apple’s main battleground, a segment that has been less affected by this year’s economic and geopolitical turmoil, so the company has also benefited from it. In addition, sophisticated smartphone users are switching to high-end terminals with longer lifespans.
Tarun Pathak, research director, explained the trend of “premiumization”: “The Android ecosystem is also showing a trend of high-endization, and Samsung is leading the way with folding screen smartphones. Therefore, although Samsung’s shipments will decline by 5% in 2022, the operating Profit also fell by 1%, but it was the only top five OEM manufacturer other than Apple to record a 1% increase in revenue, and its flagship smartphones outperformed market forecasts. Nevertheless, as profits fell less than the overall smartphone market, Its share of operating profit increases slightly to 12% in 2022.”
In addition to facing global economic and geopolitical difficulties, Chinese smartphone manufacturers were also affected by domestic epidemic control for most of the year. As a result, shipments of Xiaomi, OPPO* and vivo each fell by more than 20%. While major Chinese brands offer high-margin premium phones, they will take time to gain a foothold in the high-end market and have yet to take full advantage of Huawei’s decline. As a result, double-digit declines in its revenue and operating profit were in line with expectations.
Counterpoint expects the market to remain under pressure until the end of the first half of 2023 before it starts to recover.
