Omdia: Global smartphone shipments in the second quarter of 2023 totaled 265.9 million units, down 9.5% year-on-year

Key Points

Omdia's smartphone forecast report shows that in the second quarter of this year, global smartphone shipments totaled 265.9 million units, down 9.5% year-on-year and 1.2% quarter-on-quarter. Except for Transsion and Huawei, the shipments of other mainstream manufacturers all declined year-on-year, with Apple, Samsung and Xiaomi experiencing the largest declines, all of which saw year-on-year declines of more than 10%.

This is the eighth consecutive quarter of decline in global smartphone shipments. Many factors have led to this result. Smartphone demand recovered during the COVID-19 pandemic from the fourth quarter of 2020 to the third quarter of 2021, but at the same time it faced many challenges from the industry and the economy, such as component supply issues and the contraction of consumer demand during a period of high inflation.

Samsung is still the largest manufacturer in the world in the second quarter, with 53.3 million units shipped, down 11.5% from the previous quarter, but down 14.3% from the previous year, which is worrying. This is mainly due to the decline in demand for mid- and low-end smartphones caused by the continued economic downturn, and Samsung's A series product shipments have fallen sharply. Despite this, Samsung still ranks first in smartphone shipments with a 20% global market share.

After experiencing a slight year-on-year growth in shipments brought by the new iPhone 14 series in the first quarter of this year, Apple's smartphone shipments in the second quarter recorded 43.2 million units, a quarter-on-quarter decline of 24.6% and a year-on-year decline of 11.7%. Apple's global market share also fell to the normal level of the same period in the past, at 16%. In the past, Apple showed greater resilience during the market recession, but now it is beginning to feel the contraction.

"iPhone 14 Pro and iPhone 14 Pro Max sales were strong, but sales of the standard and Plus versions were weak relative to previous generations. Typically, sales of the standard version of the iPhone are the main force driving overall shipments starting in the second quarter. But this year is different. Demand for Pro and Pro Max is increasing, especially among high-income consumers," said Jusy Hong, senior research manager at Omdia.

Xiaomi's global shipments continued to decline, falling from 39.4 million units in the second quarter of 2022 to 33.2 million units, a year-on-year decrease of 15.7%. It still occupies the third position in the world, but faces strong competition from other Chinese brands Oppo and vivo. The weak Indian market remains an issue for Xiaomi's largest market. However, it is further gaining a foothold in Western Europe, which many other Chinese brands have failed to do.

Oppo (including OnePlus) shipped 25 million units in the second quarter of 2023, down 10.5% from the previous year. The gap with Xiaomi is narrowing, and Xiaomi's lead over Oppo has dropped from 11.5 million in the second quarter of 2022 to 8.3 million in the second quarter of 2023.

Transsion's total shipments for the quarter were 24.5 million units, up 38.4% year-on-year from 17.7 million units in the second quarter of 2022. This pushed Transsion to surpass vivo to become the world's fifth-largest smartphone company in the second quarter of 2023, after a long period of stagnation as the company digested inventory until the first quarter of 2023. And its efforts to expand into more markets have also proved successful.

Li Zegang, chief analyst at Omdia, said: "The main reason for the increase in shipments is that Transsion completed inventory adjustments in the first quarter of this year and increased the supply of new products from the second quarter. In addition to the African market, Transsion is targeting the low-end smartphone market in more countries in Asia and Oceania."

Vivo was pushed to sixth place globally, despite having better performance than many of its competitors. The company's shipments fell 10.1% year-on-year, from 24.8 million units in the second quarter of 2022 to 22.3 million units in the second quarter of 2023. Despite this, it maintained a stable market share of 8% globally, squeezing Xiaomi's lead from 14.6 million units in the second quarter of 2022 to 10.9 million units in the second quarter of 2023. Unlike many other Chinese brands, Vivo has been focusing on the domestic and Asia-Pacific markets, especially making great progress in the Indian market, outperforming OPPO.

Honor's shipments recovered in the first quarter of this year during the production adjustment, with shipments of 14.1 million units this quarter, a quarter-on-quarter increase of 25.9%. The growth this quarter was mainly due to the growth in shipments in overseas markets. Although Honor's domestic market shipments are stable, due to the decline in the overall market, it is difficult for Honor to surpass its 2022 shipment record.

Realme has a very similar market performance to Honor, with shipments recovering from the decline in the first quarter of 2023, but still lagging behind the same period last year. The company shipped 10.1 million units in the second quarter of 2013, up 23.2% from 8.2 million units in the first quarter of this year, but still down 24.6% from the second quarter of 2022. This recovery came from the digestion of inventory, the recovery of demand in the Asia-Pacific market, and the increase in sales in the low-end market. Despite this, it is still the ninth largest smartphone brand, having been surpassed by Motorola in the past quarter.

"It is no coincidence that Chinese smartphone companies are experiencing worse market conditions than other competitors. This is a result of the continued shrinking domestic market and restrictions with more international regional markets, which have hampered penetration in that market. Realme, in particular, is likely to be hit harder as its product range is mainly at the low-end price point, so demand is more resilient than brands occupying the high-end smartphone market," said Li Zegang.

The gap between Realme and Motorola has narrowed to a minimum. Motorola shipped only 300,000 more units than Realme in the second quarter of 2023, totaling 10.4 million units. This is almost flat quarter-on-quarter, but down 18.2% from the second quarter of 2022.

Huawei is back on track for recovery this quarter. The company shipped 7.4 million units in Q2 2023, up 15.6% from 6.4 million units in Q1 2023 and Q2 2022. This follows two quarters of contraction in shipments in Q4 2022 and Q1 2023, following a year of growth from Q4 2021 to Q3 2022. Overall, Huawei is performing well amid very tough market conditions and competition. It is in a much stronger position now than it was a year ago, however, without the right to produce 5G smartphones, this growth will be capped.

Jusy concluded, “The smartphone industry remains in a downturn and we expect the market to contract year-on-year by the third quarter of 2023. However, there is hope for economic recovery in the fourth quarter of this year. Both Apple and Samsung have faced challenges and have therefore lowered their targets. But these problems will ease by the end of this year and in 2024. Inflation and the resulting wage crunch and the global economy are already slowing down, and many companies are already dealing with high inventory levels. The increasing number of refurbished smartphones has hampered the growth of new smartphone shipments, which is the main reason for the recent decline in demand in the mid-range smartphone market. The overall shipment forecast for this year has been revised down in the past few months. However, we expect smartphone shipments to recover as the economy recovers.”