Robert Triggs/Android Authority
TL;DR
- Smartphone sales are below 100 million for the second time in eight years.
- The market reached its peak in 2016-17.
- Economic slowdown, rising inflation and the crisis in Ukraine are some of the reasons for the decline.
Global smartphone sales have fallen below 100 million units for the second time in eight years. It is the worst sale since the pandemic struck in 2020, according to a report from Counterpoint Research.
Smartphone sales reached 96 million units in May 2022. That is a decrease of 4% compared to April and a remarkable decrease of 10% compared to May last year.
What is causing this decline? Well, it seems that while the smartphone market is slowly solving the global chip shortage and supply constraints, it is now facing a decline in demand due to rising inflation, China’s economic slowdown and the crisis in Ukraine.
Is the smartphone peak behind us for good?
Do you remember 2016-2017? Apple released its first iPhone SE, which was a game-changer for its time. LG still made phones like the V20 with two screens. Samsung had the Galaxy Note 7 disaster. Motorola introduced the modular Moto Z. Well. That was the time when the smartphone market was at its peak. Global smartphone sales in 2016 totaled 1.5 billion units.
Fast forward to 2022, and smartphone makers are struggling to build up inventories as people buy fewer phones. This, in turn, is leading to declining shipments and budget cuts from smartphone manufacturers, Counterpoint notes.
That said, things look hopeful for the second half of 2022. Counterpoint’s research shows that new launches and promotions starting in June will help the smartphone market recover lost profits.
“In late May, the Chinese government agreed to a meeting for large-scale countermeasures to economic stability. The government is expected to adopt a more aggressive policy to stimulate the economy in the second half. In addition, we believe the launch of new foldable smartphones led by Samsung will be able to boost demand in the premium segment,” said Liz Lee, Senior Analyst at Counterpoint Research.
The research firm still expected the smartphone market to shrink by 3% this year compared to 2021.
Research Director Tarun Pathak said: “Demand for a smartphone, especially in advanced economies, is driven by replacement, making it a discretionary purchase. And inflationary pressures are driving pessimistic consumer confidence around the world, with people making non-essential purchases, including smartphones.”
In a nutshell, if the industry is to return to previous heights, it will have to wait for an economic recovery and overcome other destabilizing factors, such as the pandemic and supply constraints.