Smartphone sales globally have slipped below the 100-million mark in May 2022, according to Counterpoint Research's Market Pulse Service. The research said that the global market sales of smartphones have dropped 4 percent month-on-month (MoM) and 10 percent year-on-year (YoY) in May this year, marking the second consecutive drop in MoM sales and 11th consecutive decline in YoY sales. The report added that the smartphone sales are yet to reach the pre-pandemic mark, event after seeing a V-shaped recovery following the COVID-19 pandemic.
According to a report from Counterpoint Research's Market Pulse Service, the market sales of smartphones globally have plummeted to 96 million units in May 2022. This is said to be a 4 percent drop in sales MoM and a 10 percent drop in sales YoY. The report added that this marks the second consecutive decline in MoM sales and 11th consecutive drop in YoY sales. It said that, even after a V-shaped recovery from the COVID-19 pandemic, the global smartphone sales have still not reached the pre-pandemic levels. The smartphone market was hit by supply-chain constraints and persistent COVID-19 waves in 2021. The component shortages are said to be stabilising this year.
The report added that in 2022 the smartphone market has been hit by demand shortage because of rising inflation, China's economic slowdown, and the Russia-Ukraine war. The low demand is said to be leading to inventory build-ups resulting in declining shipments and order cuts from smartphone manufacturers. In the second quarter, sales can be most heavily impacted, with the situation being expected to improve in the second half of 2022.
Varun Mishra, Senior Analyst, talking about the China market and Russia-Ukraine war, said, “China's lockdowns and prolonged economic slowdown has been hurting domestic demand as well as undermining the global supply chain. The smartphone market in China recovered slightly month on month in May as lockdowns eased, however, it remained 17 percent below May 2021. There may need to be a new baseline market size defined for China's smartphone market. Added to this is the uncertainty created by the Russia-Ukraine crisis, which is hurting demand in Eastern Europe. None of the OEMs seems to be spared from the negative impact on demand caused by a mix of these factors.”
As per the Counterpoint macro index, the situation is expected to get better in the second half of 2022 as the economic situation is China normalises, supply and demand improves in the technology supply chains, and the macroeconomic landscape improves. According to the report, June marks the beginning of period of promotions in several region, like 618 in China and Diwali in India, followed by Christmas and New Year. Samsung Galaxy Z Fold 4 and iPhone 14 series launches are likely to help increase demand of smartphones.
Tarun Pathak, Research Director, talking about Inflation, said, “The demand for a smartphone especially in the advanced economies is driven by replacement, which makes it a discretionary purchase. And inflationary pressures are leading to pessimistic consumer sentiment around the globe with people postponing non-essential purchases, including smartphones. The strengthening US dollar is also hurting emerging economies. A segment of consumers is likely to wait for seasonal promotions before purchasing to offset some of the cost pressures.”