Smartphone shipments have fallen for the fourth straight quarter, but prices still remain relatively low, making this a great time to buy low-to-midrange phones.
The smartphone industry is going through tough times, but organizations looking to buy or replace cell phones for their employees may find this a suitable opportunity to buy. For the second quarter of 2022, smartphone shipments fell 9%, according to the latest data from research firms Canalys and IDC. The 286 million smartphones shipped was the lowest quarterly figure since the second quarter of 2020, Canalys reported:and signaled the fourth quarter in a row of declines, idc said:.
What is responsible for the decline in smartphone sales?
Supply Chain hiccups are no longer the problem; instead, oversupply is the problem as customer demand has fallen in the face of rising inflation and economic fears.
“While supply improved as capacity and production grew, rising inflation and economic uncertainty have severely dampened consumer spending and inventory across all regions,” said Nabila Popal, research director for IDC’s Worldwide Tracker team. “OEMs have been cutting orders for the rest of the year, with Chinese suppliers making the biggest cuts as their largest market continues to struggle.”
The oversupply has led to price cuts for key smartphone components, according to Canalys analyst Toby Zhu, driving down costs for suppliers. As a result, suppliers can use the cost savings to improve the competitiveness of new product launches in the second half of the year. But such a move could make it harder to sell older smartphone models, Zhu added.
While smartphone sellers are hurt, the lower demand and higher supply could be a boon for smartphone buyers, especially organizations.
TO SEE: BYOD approval form (Tech Republic Premium)
“For businesses, device availability is very good compared to last year’s situation,” Canalys research analyst Runar Bjørhovde told TechRepublic. “Many companies are pursuing a broad portfolio of very low-cost, mid-price and high-end flagship devices for various purposes within the business, and the availability of these devices is once again strong.”
With the current situation, smartphone prices remain relatively low, offering companies a buying opportunity to buy low-to-mid-range phones, explains Bjørhovde. Over time, however, higher component costs will drive prices up, just as higher costs caused the latest rise in inflation.
Potential Benefits for Business Buyers
Still, the second half of 2022 remains exciting and attractive for smartphone customers with new devices from the likes of Apple, Google, Samsung and Motorola, said Bjørhovde. Prior to the launch of new phones, business customers may be able to close some deals to get more bang for their buck.
“Businesses can get good deals by buying larger quantities, as it not only helps to create bigger deals for the smartphone vendors, but also to clear inventory ahead of the upcoming launches,” said Bjørhovde. “The B2B-focused vendors simultaneously offer relevant and useful packages, often including security solutions, managed device solutions, and other hardware products that help businesses get great deals on purchasing their next set of smartphones.”
For the quarter, Samsung remained the world’s largest smartphone supplier with shipments of 62 million, a 6% gain from the same quarter in 2021, giving it a 21% share of the market. In second place, Apple saw its iPhone shipments rise to 49 million, gaining a 17% market share, according to Canalys. IDC linked Apple’s shipments to 45 million with a 16% market share. Chinese suppliers Xiaomi, Oppo and Vivo were all hit by a drop in shipments and lower cuts in the market.
“In the premium segment, Samsung emphasized the focus on foldable phones and the S Series as profit drivers in developed markets,” said Bjørhovde. “Meanwhile, solid demand for the iPhone 13 series in North America, China and Europe has allowed Apple to grow despite the headwinds. The high end has proved relatively resilient during the recession, while promotions and financing options have contributed to affordability.
According to Bjørhovde, suppliers will be concerned about overall demand over the next 12 months, as they want to understand which price levels and market segments will see stronger demand. Demand in certain regions is expected to pick up around the end of the year, Popal said, but noted that the smartphone market outlook for 2022 will be revised down a few points. However, he added that he believes any downturn today is not a lost question, just pushed forward.
