Written by | Li Lili
Edit the | Li Xinma
Title | IC Photo
After 10 years, China's smartphone market shipments fell below 300 million again, the largest decline in history.
According to IDC's quarterly mobile phone tracker, in the fourth quarter of 2022, China's smartphone market shipped about 72.92 million units, down 12.6% year-on-year. In 2022, China's smartphone market shipped about 286 million units, down 13.2% year-on-year.
China's smartphone shipments and growth rate Image source: IDC
The data shows that in 2022, China's smartphone market will show a rhythm of "high before and then low". Shipments in the first quarter fell 14% year-on-year, but it was the highest quarter of the year, with shipments in the second quarter hitting a 10-year low, improving in the third quarter, and the fourth quarter becoming a price reduction promotion season for major manufacturers, but the market is still sluggish.
In 2022, strict anti-epidemic policies led to record growth in household savings, consumer confidence fell to its lowest level since April in October and November, and despite the relaxation of epidemic prevention and control in December, economic production activity at the end of the year was also affected by the explosive increase in cases.
The cold air of the domestic mobile phone market has also blown to the world. Affected by the Asia-Pacific region and Europe, global mobile phone shipments have also fallen to a new low in nearly a decade.
Global smartphone shipments Image source: Cangys
According to Canalys, global smartphone shipments fell 18% to 297 million units in the fourth quarter of 2022. Due to weak demand, manufacturers shipped less than 1.2 billion units in total in 2022, resulting in a 12% decline in global annual shipments.
Changes in smartphone shipments in regions around the world Image source: Canalys
From the data in 2022, the top five manufacturers of Apple, Samsung, Xiaomi, OPPO, and vivo have collectively plummeted, and none of them have been spared. Among them, the traditional international giants Samsung and Apple fell by 4.1% and 4% respectively, and their market shares still ranked in the top two, while domestic manufacturers Xiaomi, OPPO and vivo fell by 19.8%, 22.7% and 22.8% respectively.
Image source: IDC
Canalys analyst Sanyam Chaurasia said: "At the end of 2022, both Samsung and Apple's shipments were hit hard. Despite some signs of stabilization in Q3, Asia Pacific and Europe performed their worst ever in Q4 2022. Significant inventory backlogs in top markets, such as India and Chinese mainland, led to disappointing market performance in the final quarter of the year. ”
First, price cuts, layoffs, market downturn has long been foreshadowed
In the third quarter of 2022, domestic mobile phone shipments fell by 9.7% year-on-year.
In November, DoNews visited Huawei National Exhibition Tianhong store, vivo Lishuiqiao store, glory Longqi Plaza store, Beijing Hualian Xiaomi Home and other mobile phone stores, and found that each mobile phone brand has a certain degree of price reduction, but from the sales volume in the fourth quarter, the effect of price reduction promotion is minimal.
In addition to price cuts, mobile phone manufacturers have also frequently reported layoffs and orders due to operating pressure.
On December 19, "Xiaomi layoffs" quickly made headlines in the science and technology section, and some Xiaomi employees pointed out that Xiaomi's mobile phone department, Internet department, China department and other departments are involved, but the intensity of layoffs varies between departments. Among them, the proportion of layoffs in individual departments in China is as high as 75%, and the Internet Department also has teams that cut 40% of employees.
In the same month, news of Samsung's sharp reduction in orders was also broken. On December 26, according to Korean media The Elec, due to global inflation and other reasons, Samsung slashed the order of the main 5G entry model Galaxy A23, and the order range was sharply reduced from the original order of 12.6 million units to 4 million, which is currently the largest number of Samsung models.
In addition, the market downturn is also reflected in the operation of supply chain manufacturers. As early as December 16, 2022, mobile phone chip manufacturer Haowei pointed out in a letter to employees: "The current market conditions are very serious, we are facing great market challenges, price, inventory and supply chain are facing extreme pressure, so we must carry out cost control, and the goal is to reduce costs by 20% in 2023." ”
The development of smart phones also seems to have reached a bottleneck, and the current smart phones, as long as they are not entry-level processors, can basically run popular mobile games smoothly; Even if a higher-definition mobile phone image module is iteratively produced, many users only use it to scan the code. The promotion of 5G mobile phones is also far below expectations, there is a lack of new killer applications on the market, and for ordinary consumers, the experience of replacing mobile phones is less and less, and the replacement power is becoming more and more insufficient.
Xiao Guo is a mobile phone enthusiast, he told DoNews: "I used to like to change mobile phones, at least 2 in 1 year, and basically have two machines in hand, but the epidemic in the past two years has basically not changed, the current mobile phone has been used for more than 2 years, daily games and photos can be satisfied, I really feel that there is no need to change." ”
The economic uncertainty brought about by the epidemic has also made many consumers more inclined to conservative consumption. In the past, electronic FMCG products that were "replaced once a year" have actually become durable goods to some extent, and the average replacement cycle of consumers has become longer and longer.
Guo Tianxiang, senior analyst at IDC China, concluded: "The main reason for the continuous decline of China's smartphone market is what the entire industry has been recognizing - the market is saturated and the replacement cycle is lengthened; Technological development has encountered bottlenecks and insufficient innovation of new products; The 5G push is lower than expected, lacking new 'killer' applications; product quality is getting better and better, performance is excessive, and other factors. ”
Second, consumers are more willing to pay for "new products and new experiences"
According to IDC data, in 2022, among the shipments of domestic brands, only Honor increased by 34.4% year-on-year. Canalys data shows that Honor's shipments were 52.2 million, an increase of 12 million units, and the gap with the first-place vivo market share continues to narrow.
The growth of Honor's shipments is mainly related to the company's restructuring of products after a series of layouts. According to statistics, last year Honor released a number of products, including Honor 70, Honor 80 series and other main models, with prices spanning 1699 yuan to 16999 yuan, covering the user needs of low, medium and high grades.
Top5 shipments in the fourth quarter of 2022 Image source: IDC
Top5 shipments in 2022 Image source: IDC
There is also Apple that has increased the layout of innovation in products. When Apple first launched the iPhone 14 Pro series with the "Smart Island" design, it was complained by consumers, but since then it has ranked first in the sales list, helping Apple become another manufacturer with a year-on-year increase in market share in 2022 in the context of the market downturn.
As one of the more novel categories, the performance of folding screens has also exceeded expectations. According to IDC data, in the fourth quarter of 2022, China's single-quarter shipments of folding screen products reached a new high, with more than 1.1 million units shipped. Annual shipments of nearly 3.3 million units, a year-on-year increase of 118%, and the proportion of folding screen products in the domestic smartphone market increased from 0.5% in 2021 to 1.2%. Zhang Qi analyst said: "In terms of innovation and differentiation, folding screen mobile phones will bring vitality and highlights to the market with more products, lower prices and more fierce competition. ”
At present, the folding screen products on the market have more or less shortcomings, such as low refresh rate, fast power consumption, and software that cannot be adapted, but they are sought after by consumers due to the new experience brought by the product. Folding screen products have therefore become the focus of various head manufacturers and long-term layout products, and the market attention remains high.
In 2022, almost all the head Android manufacturers have released related products, forming a dual flagship product strategy of straight board machine + folding screen, and even many manufacturers have achieved a "horizontal folding + vertical folding" dual-folding screen product layout. Among them, vertical folding products are especially favored by female users due to their convenient portability, and the product share has accounted for 42.3% of the folding screen market.
In the future, product differentiation and innovation will become one of the most important competitiveness. Zhang Qi said: "As China's smartphone market transforms into a mature market, it is expected that the market will still focus on the two main lines of high-end and differentiation in 2023. High-end smartphones have relatively high profits, and they are more in line with the main theme of China's overall consumption upgrade. ”
Third, the market will continue to be sluggish in the future
2023 will be a difficult year, and recent macroeconomic trends also indicate that the risk of a global recession is increasing, and the recovery path of the smartphone market will be uncertain.
Since it takes a certain amount of time for mobile phones to complete the mass production of the entire model from the procurement of parts, the relevant planning is pre-emptive, and up to now, mobile phone brands have basically completed the production plan for the whole year.
According to The Elec, Samsung plans to produce 290.68 million smartphones in 2023, down about 13% from the original target of 334.2 million this year. Last year's shipment targets for major mobile phone terminals in 2023 have long been finalized, Apple's shipment target in 2023 is about 240 million units, and the shipment targets of Xiaomi, OPPO, Honor, and vivo are 140 million, 140 million, 59 million and 90 million respectively.
From the data point of view, global smartphone shipments will also be less than 1.2 billion units in 2023. The downturn in the market will also further intensify market competition, and mobile phone upstream suppliers are facing greater pressure in terms of price and inventory.
In the past 2022, the high inventory level is an important problem that plagues mobile phone manufacturers. After the promotion season in the fourth quarter, most manufacturers have further eased their inventory pressure and controlled the inventory level at a normal level, but manufacturers have also slowed down the expansion of their offline channels and begun to pursue a stable channel layout.
DoNews visited sales at offline mobile phone stores in Beijing, where price cuts slowed compared to the sale at the end of last year.
The employees of vivo Longde Plaza store said that now the newly released vivo S6 has no activities, and can go to employees to order 100 yuan off, normal no activities. The employee of OPPO Longde Plaza store said: "Now the online purchase is still a lot of the original price, there will still be activities in the store, basically minus 100 yuan." ”
Glory Hualian Store Photo by DoNews
Xiaomi Longde Plaza store also said: "Just buy a mobile phone does not reduce the price, give a gift box, most of the mobile phones are now inactive, individual can be 100 yuan cheaper, even if the next generation of new machines are on the market, it will not necessarily reduce the price." ”
Overall, although the epidemic control policy has ended, it is still difficult for China's smartphone market prospects to rebound immediately, and the stimulus effect of policy liberalization on the economy and demand may take 6-12 months to gradually reflect, and the cold winter of the market will continue for a while.