Inflation and the economic downturn led to the smartphone market suffering its worst-ever shipment decline in Q4 2022, according to research firm IDC.
Smartphone shipments last quarter only reached 300.3 million units, down 18.3% from the year before, marking the “largest-ever decline in a single quarter,” IDC announced on Wednesday.
During the quarter, all the top smartphone vendors, including Apple, experienced shipment drops in the double digits. In addition, Q4 was the sixth consecutive quarter of decline for the smartphone market.
Rival research firm Canalys reported similar shipment numbers for the period, and said Q4 marked the worst performance in a decade.
Looking at the numbers across the entirety of 2022, smartphone shipments reached only 1.2 billion units, down 11.3% from the year before. According to IDC, 2022 represents “the lowest annual shipment total since 2013 due to significantly dampened consumer demand, inflation, and economic uncertainties.”
“We have never seen shipments in the holiday quarter come in lower than the previous quarter. However, weakened demand and high inventory caused vendors to cut back drastically on shipments,” said IDC researcher Nabila Popal.
As a result, IDC expects the smartphone market might not see shipment growth until the very end of 2023. One reason is persistent inflation, which is stunting consumer demand. Another factor is that many smartphone owners have decided to hold off on upgrading.
“We continue to witness consumer demand dwindle as refresh rates climb past 40 months in most major markets,” said IDC analyst Anthony Scarsella. “With 2022 declining more than 11% for the year, 2023 is set up to be a year of caution as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory.”
The good news is that consumers may find attractive discounts or trade-in offers for new smartphones as vendors try to spark growth, IDC added. dff
The news comes ahead of Samsung's Feb. 1 Unpacked event, where it's expected to announce its next flagship smartphone, the Galaxy S23.