Smartphone Market Continues Slide, Drops 9% in Q3: Canalys
The global smartphone market fell for the third consecutive quarter in Q3, dropping 9% year on year, for the worst Q3 since 2014, reported Canalys Tuesday. Consumers delayed buying electronics to prioritize essential spending, a trend that’s likely to continue to limit the smartphone market for the next six to nine months, it said. “The smartphone market is highly reactive to consumer demand and vendors are adjusting quickly to the harsh business conditions,” said Canalys analyst Amber Liu, saying most vendors are focusing on reducing the risk of inventory buildup “given deteriorating demand.” Vendors had “significant stockpiles going into July,” but sell-through gradually improved from September due to aggressive discounting and promotions, she said. “The pricing strategy of new products is cautiously crafted, even for Apple, to avoid significant pushback from consumers who now tend to be very sensitive to any price hike,” Liu said. Samsung used “heavy promotions” to retain its leadership position, holding 22% market share in Q3, up a percentage point from Q3 2021, Canalys said. Apple gained 3 share points to 18% in Q3. Demand “shows no signs of improvement” heading into Q4 and first half 2023 so vendors have to balance forecasts with the supply chain and distribution to hold market share, said analyst Sanyam Chaurasia. “Going into the sales season, consumers who have been delaying purchases will expect steep discounts and bundling promotions as well as significant price reductions on older generation devices,” Chaurasia said. Compared with strong demand in Q4 2021, a “slow but steady festive sale is anticipated” this quarter, he said, but it’s too early to tell whether Q4 will be a “turning point of market recovery.” Rounding out the top five vendors were Xiaomi with 14 share, Oppo at 10% and vivo at 9%. Apple was the only top-five vendor with positive growth, on “relatively resilient demand for iPhones,” said the research firm.