Apple tops fourth-quarter smartphone vendor rankings as 2022 global shipments fall 11 per cent on continued weak consumer demand

Apple overcame iPhone supply chain disruptions in China to achieve its highest ever quarterly global smartphone market share at 25 per cent
Samsung finished behind Apple in the fourth quarter, but led the smartphone industry in overall shipments last year with a 22 per cent share

Smartphones

Che Panin Beijing

Published: 7:00pm, 18 Jan, 2023

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Apple overcame supply chain disruptions in China to reclaim the top spot in fourth-quarter global smartphone vendor rankings, as the industry’s overall shipments in 2022 fell 11 per cent on weak consumer demand that is expected to continue in 2023.

US tech giant Apple achieved its highest ever quarterly market share at 25 per cent, according to the latest smartphone shipment report released on Wednesday by research firm Canalys. Total worldwide smartphone shipments, however, fell 17 per cent year on year in the December quarter.

The world’s most valuable company, with a US$2.3 trillion valuation at the end of December, pulled that feat amid shrinking smartphone demand worldwide and manufacturing issues in Zhengzhou, capital of central Henan province, where the world’s largest iPhone factory is located.

Samsung Electronics finished the quarter behind Apple with a 20 per cent share, but led the industry in overall shipments last year with a 22 per cent share, according to Canalys. Chinese smartphone giants Xiaomi Corp, Oppo and Vivo rounded out the top five vendor rankings in the fourth quarter, respectively, with shares of 11 per cent, 10 per cent and 8 per cent.

A woman walks past an advertisement for Samsung Electronics’ Galaxy Z Flip4 smartphone at the company’s Seocho building in Seoul on October 7, 2022. Photo: Agence France-Presse

Still, Canalys’ latest global smartphone shipment data reflected an “extremely challenging” year for all vendors, as total volume declined 11 per cent year on year to fewer than 1.2 billion units in 2022.

“Smartphone vendors have struggled in a difficult macroeconomic environment throughout 2022,” said Canalys research analyst Runar Bjørhovde. He described the recent December quarter as the smartphone industry’s “worst annual and fourth-quarter performance in a decade”.

Distribution channels were “highly cautious in taking on new inventory”, which contributed to low shipments in the fourth quarter, according to Bjørhovde. He said the holiday sales season helped reduce inventory levels on the back of strong promotional incentives from vendors and channels.

In mainland China, the world’s largest smartphone market, major vendors including Apple and Xiaomi waged a price war to help fuel demand during the country’s annual Singles’ Day shopping festival.

China’s smartphone industry to remain under pressure in 2023, analysts say

Canalys forecasts flat to marginal growth for the global smartphone market this year, with conditions expected to remain tough.

“Vendors will approach 2023 cautiously, prioritising profitability and protecting market share,” said Canalys research analyst Le Xuan Chiew. “Vendors are cutting costs to adapt to the new market reality.”

Xiaomi, which Canalys ranked fourth in 2022 global shipments, last December saw the departure of three senior executives, including group president Wang Xiang, as the Beijing-based company pushed a new round of lay-offs. The firm’s video gaming phone brand Black Shark also laid off most of its employees and failed to make severance payments, according to Chinese media reports.

In November, Apple paused hiring for many jobs outside research and development, an escalation of an existing plan to reduce budgets heading into next year, according to a Bloomberg report that cited people with knowledge of the matter.

World’s biggest iPhone factory nears recovery from production shortage

“Though inflationary pressures will gradually ease, the effects of interest rate hikes, economic slowdowns and an increasingly struggling labour market will limit the [smartphone] market’s potential,” Canalys’ Chiew said. “This will adversely affect saturated, mid- to high-end [smartphone] markets, such as western Europe and North America.”

Chiew said China’s reopening is expected to improve domestic consumer and business confidence, but indicated that the government’s economic stimulus policies “are only likely to show [an] effect in six to nine months”. That means smartphone demand in the world’s second-largest economy “will remain challenging in the short term”.

Canalys last week reported that the global personal computer market ended on a low note, with total shipments of desktops and notebooks down 29 per cent year on year to 65.4 million units in the December quarter, marking a fourth consecutive quarter of decline. That resulted in a 16 per cent drop in total PC shipments last year to 285.1 million units.

Apple supplier Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chip maker, expects to cut spending this year, as it braces for continued weakness in the consumer electronics and computer markets.

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