Global smartphone shipments declined by 14.6% in the first quarter year-over-year to 268.6 million units. The figure was reported by the analyst company IDC which blamed “lukewarm demand, inflation, and macro uncertainties.” It highlighted that the decline was more than the 12.7% forecasted earlier.
While the figure is bad news for phone manufacturers, IDC does report that inventory is in much better shape than six months ago due to reduced shipments and heavy promotional activities to help shift stocks. Memory is also another item that’s stuck in inventory and this too is expected to start clearing by 2024, according to Gartner.
"The industry is going through a period of inventory clearing and adjustment. Market players remain cautious deploying a conservative approach rather than dumping more stock into channel to chase temporary gains in share. I think is the smart thing to do if we want to avoid an unhealthy situation like 2022," said Nabila Popal, research director with IDC"s Worldwide Tracker team. "While we are optimistic about recovery by the end of the year, we still have a tough 3-6 months ahead."
Apparently, most regions around the world saw a double-digit decline in smartphone shipments. IDC said that consumers were putting things like travel and entertainment at the top of their priority list, ahead of phone purchases. Interestingly, developed markets saw smaller declines of around 10% while emerging markets saw declines of up to 20%.
Out of all the smartphone makers, Xiaomi saw the largest decline (-23.5%) in shipments, largely due to its popularity in developing countries. The most resilient brand was Apple (-2.3%), probably due to its more affluent customer base which can continue to upgrade their iPhones despite a cost of living crisis.