Omdia: Global smartphone shipments totaled 269 million units in the first quarter of 2023, a year-on-year decrease of 12.7%

According to Omdia's latest smartphone shipment report, shipments in the first quarter of 2023 totaled 269 million units, down 12.7% year-on-year and 11.1% month-on-month. Samsung and Xiaomi saw large declines, down 18.3% and 22.0% year-on-year respectively, while Apple's shipments were the same as in the first quarter of 2022.

Although Samsung's year-on-year decline this quarter was large, it still ranked first in global smartphone shipments with 60 million units shipped. Samsung's quarter-on-quarter growth was 3.2%. It releases new Galaxy S series products in the first quarter of each year, and this growth rate is still not enough compared with the same period in the past. Compared with the first quarter of 2022, its lead over Apple has declined. In the same period of 2022, it shipped 18 million more units than Apple, while in the first quarter of this year, it only shipped 3 million more units. As a result, its market share has also dropped from 24% to 22%.

After Apple's traditional fourth-quarter pullback last year, shipments returned to normal levels in the first quarter of this year. Apple shipped 57 million units this quarter, the same as the same period last year, a slight year-on-year increase of 0.1%, but a quarter-on-quarter decrease of 23.5%. Despite this, as all other brands' shipments declined, Apple's market share increased year by year, from 18% in the first quarter of 2022 to 21% in the first quarter of 2023. Apple seems to have weathered the economic storm better than other brands and recovered from eight consecutive quarters/two years of year-on-year growth as of the fourth quarter of 2022.

"Due to production disruptions at Foxconn's Zhengzhou plant in December last year, Apple was unable to provide sufficient production for the most important sales season, Christmas and the end of the year. As a result, some of Apple's production was postponed to the first quarter of this year. In order to clear inventory in major markets such as China, the company lowered the selling price of its new iPhones for promotions at the beginning of this year. This resulted in a relatively good year-on-year growth rate in shipments in the first quarter compared to other brands. Apple's price promotions for new iPhones in the first quarter are very unusual. This seems to be a strategy to reduce inventory in preparation for the expected sluggish smartphone market in the first half of this year," said Jusy Hong, senior research manager at Omdia.

"Among the newly released iPhone 14 series, Pro Max has the highest sales volume, followed by the Pro models. It seems that these two models benefited from the application of dynamic island displays and the stable replacement demand from the high-income class that was relatively less affected by the economic recession," Jusy added.

Xiaomi's shipments still rank third in the world, but compared with other Chinese brands, it faces more severe market challenges. The inventory problems of complete machines in some international markets and the continued weak demand in India, the main single-unit market for shipments, are important reasons for the decline in shipments in the first quarter of this year. The company's shipments in the first quarter of 2023 were 3,100 units, a year-on-year decrease of 22% and a quarter-on-quarter decrease of 8.1%. China's other two major companies, OPPO and vivo, also saw a decline, but the decline was much smaller than Xiaomi, with a decrease of 2.2% and 11.2% respectively.

OPPO shipped 27 million units in the first quarter of 2023, while vivo shipped 21 million units. As a result, Xiaomi's lead over the OPPO Group has narrowed, from 12 million units in the first quarter of 2022 to only 4 million units in the first quarter of 2023. Xiaomi's market share has also dropped from 13% to 11%, while OPPO's market share has risen from 9% to 10%.

Although Transsion and Honor successfully resisted the negative impact of market conditions in the previous quarter, both suffered a sharp year-on-year decline this quarter. Transsion's shipments in the latest quarter still ranked sixth in the world, reaching 13 million units, but it fell 15.4% year-on-year and 24.9% from the previous quarter. Since the second half of last year, Transsion has also faced inventory problems due to inflation problems that have severely weakened the purchasing power of the ultra-low segment, such as Africa, Pakistan, and Bangladesh, which are Transsion Holdings' main markets, but at the same time, Transsion is also actively exploring other international markets and has achieved good growth in regions such as the Philippines, Indonesia, and Latin American countries.

Likewise, Honor's shipments have fallen to their lowest level, down 26.3% to 11 million, since its stunning growth in the second half of 2021. Honor also had inventory problems at the end of last year due to falling demand in the retail market.

Realme saw the largest year-on-year decline in shipments, falling 43.8% from 15 million units in Q1 2022 to Q1 2023. The company’s shipments fell 27.4% from 11 million units in the previous quarter, dropping its ranking to ninth in the world. Motorola has therefore moved up to eighth place, with a smaller decline in shipments, with sales of 11 million units in Q1 2023, down 12.5% ​​from 12 million units in Q1 2022.

"Compared to other brands, most Chinese brands are experiencing a worse market environment. This larger decline occurs against the backdrop of a shrinking domestic market and India, as well as a sharp drop in demand in other emerging markets. Realme, in particular, may be hit harder as its product line is mainly in the low-end price segment, so its demand is more resilient than smartphone brands focused on higher price bands," said Li Zegang, chief analyst at Omdia.

Weak demand in the domestic market also hit Huawei's recovery plans, with shipments shrinking for two consecutive quarters after a year of growth from the fourth quarter of 2021 to the third quarter of 2022. Regardless, Huawei is now in a relatively better position than a year ago, with shipments of 6.5 million units in the first quarter of 2023, up 14.3% from the 5.6 million smartphones shipped in the first quarter of 2022.

Jusy concluded: “As Omdia predicted, smartphone shipments fell again, with a few expected quarter-on-quarter growth, which is disappointing, especially after the launch of Samsung’s S23 series. The main problem facing the smartphone industry continues to be inflation and the resulting economic problems of wages and economic contraction. The problem of high inventory levels is slowly being resolved despite weak consumer demand, but this problem has lasted longer than predicted. Our forecast shows that the smartphone market is likely to bottom out in the second quarter of 2023 and then recover from the second half of this year.”