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Tuesday, June 18, 2024

Smartphone sales in 2023. Declines and record low levels

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Smartphone sales continue to decline around the world. In the second quarter of 2023, compared to the same period last year, 7.8 percent fewer of these devices hit the market. A forecast by Counterpoint Research shows that sales will decline by 6 percent to 1.15 billion units for the full year. If this happens, it will be the lowest result in a decade. Why is the market declining and when will it rebound?

Asia and Asia are indicated as the main culprits of the stagnation USA. In the first case, analysts from Counterpoint Research mention, among others: intensifying declines in emerging markets and no improvement in the economic situation in China. As for North America, it is noted that despite the good situation on the labor market and falling inflation consumers are in no rush to upgrade their devices.

– There is a disconnect between what is happening in the economy and consumers buying phones. So far, the numbers are at record lows for each vendor, points out Jeff Fieldhack, research director for North America at Counterpoint Research.

The analyst adds that the situation may improve slightly in the fourth quarter with the release of the latest iPhone model, the 15th edition. It is also a hope for improving the results in China. There, as Ethan Qi, deputy director for China, said, “Apple has a good position in the premium segment and is constantly increasing its market share.”

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The increase in prices of premium and ultra-premium devices is a trend occurring around the world and favoring suppliers such as Apple, whose offer is addressed to this customer segment.

IDC expects growth

The analysis by IDC (International Data Corporation) shows that in the second quarter of this year, 7.8% more fewer calls than last year. The largest declines were recorded by Samsung (-15.2%) and Xiaomi (-16%).

Experts from IDC note, however, that the eighth quarter in a row of declines caused by, among others, weak demand, excess inventories, inflation and macroeconomic uncertainty, it is starting to slow down.

Nabila Popal, research director for mobile and consumer devices at IDC, commenting on the last quarter’s data, noted that the good news for the market is the decreasing level of inventories, the surplus of which should disappear by the third quarter.

– As inventories reach normal levels, we see optimism from key producers and we expect the market to return to growth by the end of the year and into the next year, predicts Nabila Popal and notes that recovery and renewed growth are also an opportunity for suppliers to increase its market share.

This can already be observed, because in the second quarter, Transsion was among the top five smartphone manufacturers for the first time.

Smartphone shipments worldwide

Stagnation due to lack of revolution

Lech Okoń, editor-in-chief of the Telepolis.pl portal, referring to the data, notes that we are also dealing with a broader phenomenon.

– Phone sales have been driven by milestones from the very beginning. These are technologies that have allowed the industry to reach a higher level and offer consumers something truly fresh. First it was miniaturization, then color displays. Later still, built-in cameras, and finally the concept of a smartphone as a multi-tasking device with extensive personalization options, installing applications, etc. The thing is that there has been obvious stagnation in the industry for several years, and subsequent generations are no longer revolutionary – notes Okoń.

The editor-in-chief of Telepolis.pl points out that currently manufacturers are only introducing cosmetic improvements, a good example of which is the “iconic iPhone”.

– While until recently it seemed that a few months were centuries in technology, the now almost 3-year-old iPhone 12 actually does not lag behind the latest proposals. Therefore, it is difficult to convince the consumer to exchange. Especially in the face of difficulties with access to semiconductors and the global crisis, which imply price increases. As a result, the phone stays with us as long as it does not become really visibly worn out. And even the chemical aging of the battery, which negatively affects the operating time, is not a process so fast as to require replacement with each subsequent generation. Besides, the battery can always be replaced, which, by the way, is starting to be a thing these days European Union. In other words, frequent purchases of a smartphone no longer make sense – sums up the TVN24 Biznes interviewee.

The situation on the laptop market

As IDC notes, the situation on the personal computer market is slightly better, as there are signs of growth on the horizon.

It is forecast that in 2024, deliveries of personal computers will increase by 3%. year on year, reaching 261.4 million shipments. Parcel volume will be higher than 259.6 million in 2018, but still lower than 2019 levels.

IDC says the industry continues to face challenges, including concerns about the consumer refresh cycle, companies accelerating device purchases, and education budgets failing to recover in many markets. As a result, deliveries in 2023 are forecast to decline by 13.7%. year on year, up to 252 million pieces.

“Consumer demand remains moderate at best as the segment continues to face economic difficulties,” said Jitesh Ubrani, research manager at IDC Mobility and Consumer Device Trackers. – Consumer demand for computers is also related to the demand for other devices, such as smartphones, consoles and tablets. This means that 2023 will be the year of the largest annual decline in PC shipments since the beginning of this category, he concludes.

Artificial intelligence has an impact on the computer market

In IDC’s opinion, the PC market is becoming very interesting. Largely due to the boom in generative artificial intelligence. Its appearance means that decision-makers from the IT industry are now wondering how to shape and prioritize their budgets.

“And while AI-enabled PCs aren’t ready right now, their arrival will change some of the conversation around enterprise device purchases. Finally, the shift to remote/hybrid work environments hasn’t gone away, and we continue to hear that many companies listens to the requests of its employees. This includes brands, types of computers and whether multiple computers are needed for a hybrid work environment,” IDC notes in the market analysis.

“It’s hard to have a conversation these days that isn’t about artificial intelligence and where and how to invest,” said Ryan Reith, vice president of IDC’s mobile and consumer group.

Reith notes that an increased demand for commercial computers can soon be expected.

– Windows 10 will end support in 2025, bringing a refresh to the market, whether businesses are waiting for more advanced desktop solutions or simply need to update their aging installed base. It seems clear that Apple sees an opportunity for further development in the commercial segment and it is worth watching the market in the future from this angle – the analyst pointed out.

Main photo source: Shutterstock

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