Global smartphone market declines for the fifth consecutive quarter, here’s what’s hurting sales – Times of India
A preliminary report on the global smartphone market for the first quarter of 2023 has arrived. According to a report by Canalys, global smartphone shipments have declined 12% YoY in Q1 2023. This decline has been reportedly recorded for a fifth consecutive quarter. The report mentions that a decreased interest in the iPhone 14 Pro series has helped Samsung to regain the top spot. However, Xiaomi has managed to retain the third position even after losing a big chunk of sales.
What’s behind the fall in smartphone sales
Analyst Sanyam Chaurasia has explained: “The smartphone market’s decline in the first quarter of 2023 was within expectations throughout the industry. The local macroeconomic conditions continued to hinder vendors’ investments and operations in several markets.”
Chaurasia added, “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. Additionally, 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.”
He also noted that “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.”
The report also mentions that continuing weak demand has caused smartphone manufacturers to reduce production volumes to clear existing inventory. This move by several OEMs has negatively impacted the component supply chain.
During this tough period, manufacturers have been more active in planning their production and optimising orders. The report also claims that the smartphone market is expected to recover in Q2 2023 as companies are expected to clear the existing stock by then.
What’s behind the fall in smartphone sales
Analyst Sanyam Chaurasia has explained: “The smartphone market’s decline in the first quarter of 2023 was within expectations throughout the industry. The local macroeconomic conditions continued to hinder vendors’ investments and operations in several markets.”
Chaurasia added, “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. Additionally, 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.”
He also noted that “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.”
The report also mentions that continuing weak demand has caused smartphone manufacturers to reduce production volumes to clear existing inventory. This move by several OEMs has negatively impacted the component supply chain.
During this tough period, manufacturers have been more active in planning their production and optimising orders. The report also claims that the smartphone market is expected to recover in Q2 2023 as companies are expected to clear the existing stock by then.
Source: Canalys
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