Inflation: Smartphone shipments fall by over 14%

Global smartphone shipments declined 14.6 per cent year-on-year to 268.6 million units in the first quarter of 2023, according to preliminary data from the International Data Corporation Worldwide Quarterly Mobile Phone Tracker.

This was the seventh consecutive quarter of decline as the smartphone market continued to struggle with lukewarm demand, inflation, and macro uncertainties. IDC stated that the decline was more than the 12.7 per cent it had previously forecasted.

The Research Director of IDC’s Worldwide Tracker team, Nabila Popal, said, “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 a channel to chase temporary gains in share. I think this is the smart thing to do if we want to avoid an unhealthy situation like 2022.

“While we are optimistic about recovery by the end of the year, we still have a tough 3–6 months ahead. Everyone is anxious about exactly when the tide will turn and wants to be the first to ride the wave of recovery. However, it is a tricky situation.”

He explained that the IDC expected the market to cross into positive territory in the third quarter and see healthy double-digit growth by the holiday quarter (Q4).

The firm noted that almost all the regions suffered a double-digit decline in Q1 23, with China witnessing close to a 12 per cent drop, the USA and Western Europe declining by 11.5 per cent and 9.4 per cent respectively, and emerging markets falling by 17- 20 per cent.

The Group Vice President, IDC’s Worldwide Tracker team, Ryan Reith, suggested that the smartphone industry was gaining confidence that will return to growth late this year and into 2024.

Reith said, “The largest supply-side pullback in recent months was primarily those brands that serve the mid to low end of the market. This is usually where competition is high, and margins are low.