Worldwide smartphone demand drops on rising inflation
By Jeph Ajobaju, Chief Copy Editor
Demand for smartphones has dropped worldwide as rising inflation caused shipments to slash 9 per cent in the second quarter ended June 2022 (Q2 2022).
The latest report by Canalys, a global smartphone analyst company that monitors shipments by device makers, said worldwide economic gloom throws up a slow cycle for devices manufacturers as shipments had declined 11 per cent in Q1 2022.
Samsung took first place with 21 per cent market share in Q2 2022 as it strengthened its low-end A series supply. Apple came second with 17 per cent share as the iPhone 13 remained in high demand.
Xiaomi, OPPO and Vivo continued to struggle in China, suffering double-digit declines to take 14 per cent, 10 per cent, and 9 per cent market shares respectively.
“Vendors were forced to review their tactics in Q2 as the outlook for the smartphone market became more cautious.
“Economic headwinds, sluggish demand, and inventory pileup have resulted in vendors rapidly reassessing their portfolio strategies for the rest of 2022,” Canalys Research Analyst Runar Bjørhovde said.
“The oversupplied mid-range is an exposed segment for vendors to focus on adjusting new launches, as budget-constrained consumers shift their device purchases toward the lower end.”
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Great concern
“Falling demand is causing great concern for the entire smartphone supply chain,” added another Canalys Analyst Toby Zhu, per reporting by Nairametrics.
“While component supplies and cost pressures are easing, a few concerns remain within logistics and production, such as some emerging markets’ tightening import laws and customs procedures delaying shipments.
“In the near term, vendors will look to accelerate sell-through using promotions and offers ahead of new launches during the holiday season to alleviate the channel’s liquidity pressure.
“But in contrast to last year’s pent-up demand, consumers’ disposable income has been affected by soaring inflation this year.
“Deep collaboration with channels to monitor the state of inventory and supply will be vital for vendors to identify short-term opportunities while maintaining healthy channel partnerships in the long run.”
