why is the smartphone market stalling?

In an increasingly connected world, smartphone sales tend to… fall. A paradox noted by the Canalys firm, which notes a 17% drop in sales in the last quarter of 2022 compared to 2021. well, boosted by rising demand and the reduction in Covid-related supply difficulties. But the upturn was short-lived. Weighed down by this disastrous fourth quarter, the market fell by 11% over the whole of 2022 during which 1.2 billion smartphones were shipped.

“Smartphone vendors have struggled in a challenging macroeconomic environment throughout 2022,” said Runar Bjørhovde, analyst at Canalys Research. And to emphasize the “caution” of distributors when building up new stocks. “Supported by strong promotional incentives from suppliers, the sales and holiday season has helped reduce the levels of these stocks,” he adds. Asked by The echoes, Guillaume Chaigneau, the boss of Xiaomi France, points to the length of use of smartphones which tends to lengthen. “Today, the French keep their phones for about three years. This leads to a postponement of sales”.

No rebound expected for 2023

But generally speaking, it was overall demand that sagged the previous year. “While low-end and mid-range demand fell rapidly in previous quarters, high-end demand began to weaken in the fourth quarter,” Runar Bjørhovde said. The collapse of the market, on the other hand, has no consequence on its value. It would even tend to grow, driven by increasingly expensive models.

Regarding the forecasts for the year 2023, the experts do not foresee an immediate rebound. “Suppliers will approach 2023 cautiously, prioritizing profitability and protecting market share. Although inflationary pressures will gradually ease, the effects interest rate hikes, economic downturns and an increasingly difficult labor market will limit market potential,” said Le Xuan Chiew, analyst at Canalys Research.