Samsung leads smartphone market, despite global decline in Q1

Samsung currently leads the smartphone market globally with a 22 percent market share, whileApple and Chinese Xiaomi complete the top three spots with a 21 percent and 11 percent market share, respectively, a Canalys report shows.

The report, which gives a quarterly and yearly update on global smartphone shipment based on market demand and supply, noted that Samsung was the only vendor to achieve a quarter-on-quarter recovery and struggled back to number one with a 22 percent market share.

Meanwhile, Samsung’s major competitor, Apple, narrowed the gap after a resurgence brought by the increased demand for its latest product, the iPhone 14. Apple remained in second place with a 21 percent market share driven by solid demand for its iPhone 14 Pro series in the first quarter of 2023.

However, the global smartphone market experienced a fifth consecutive quarter of decline, falling by 12 percent year-on-year in Q1 2023. Despite limited improvements in major unfavorable macro factors, the market is yet to recover.

Recall that the global smartphone market recorded a drop in total shipments last year, according to a report from the International Data Corporation (IDC).

“The smartphone market’s decline in the first quarter of 2023 was within expectations throughout the industry,” said Sanyam Chaurasia, Canalys Analyst.

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“The local macroeconomic conditions continued to hinder vendors’ investments and operations in several markets. Despite price cuts and heavy promotions from vendors, consumer demand remained sluggish, particularly in the low-end segment due to high inflation affecting consumer confidence and spending.”

The Analyst added that the continuous sluggish end-user demand has triggered a major wave of destocking across the entire supply chain, with channels reducing inventory levels to secure operations.

However, to maintain a low level of sell-in volume, vendors continued to use cautious production techniques, which had a long-term negative impact on the component supply chain’s operational performance.

Toby Zhu, a Canalys Analyst, stated that there had been increases in demand for specific smartphone brands and price ranges while noting that there have been some signs of stabilization in the ongoing fall.

“There have been improvements in demand for certain smartphone products and price bands. Furthermore, some smartphone vendors are becoming more active in production planning and ordering components.

Canalys predicts that the inventory of the smartphone industry, irrespective of channel or vendor, can reach a relatively healthy level by the end of the second quarter of 2023. It is still too early to predict the recovery of overall consumer demand. However, the sell-in volume of the global smartphone market is expected to improve due to the reduction in inventories in the next few quarters.

In addition, “vendors have focused more on innovations and raising production and channel efficiencies after a round of fluctuations, shifting from growing for volumes and shares to growing for quality. 5G popularisation and foldable phones are also becoming the new driving forces in the industry,” it reports.