Wednesday, August 17, 2022
Smartphone news

Global smartphone sales fall below 100m units for only second time in 8 years


In 2021, the smartphone market was impacted by supply constraints and persistent COVID waves. In 2022, the component shortages, although not fully resolved, have been stabilizing. However, the smartphone market is now hit by a demand slump due to multiple factors including inflation, China’s slowdown, and the Ukraine crisis.

Commenting on inflationary pressures, Research Director Tarun Pathak said, “The demand for a smartphone especially in the advanced economies is driven by replacement, which makes it a discretionary purchase. And inflationary pressures are leading to pessimistic consumer sentiment around the globe with people postponing non-essential purchases, including smartphones. The strengthening US dollar is also hurting emerging economies. A segment of consumers is likely to wait for seasonal promotions before purchasing to offset some of the cost pressures. “

Commenting on the China market, and the Ukraine crisis, Senior Analyst Varun Mishra said, “China’s lockdowns and prolonged economic slowdown has been hurting domestic demand as well as undermining the global supply chain. The smartphone market in China recovered slightly month on month in May as lockdowns eased, however, it remained 17% below May 2021. There may need to be a new baseline market size defined for China’s smartphone market. Added to this is the uncertainty created by the RussiaUkraine crisis, which is hurting demand in Eastern Europe. None of the OEMs seems to be spared from the negative impact on demand caused by a mix of these factors.”

The low demand is also leading to inventory build-ups leading to declining shipments and order cuts from smartphone manufacturers. Q2 is likely to be the most heavily impacted this year in terms of sales before the situation improves in H2 2022.

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Analyst Contacts: Tarun Pathak

SOURCE Counterpoint Research



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