Time to buy a phone as retailers use discounts to clear out inventories
- Reference: 1674120614
- News link: https://www.theregister.co.uk/2023/01/19/phone_shipments_plunge_ten_year_low/
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According to preliminary findings from tech analyst Canalys, sales into the channel – tech retailers, distributors and the like – fell by a whopping 17 percent in the final three months of last year as buyers reduced wholesale purchases to clear existing inventories in anticipation of slowing sales to end users.
"Smartphone vendors have struggled in a difficult macroeconomic environment throughout 2022. Q4 marks the worst annual and Q4 performance in a decade," said research analyst Runar Bjørhovde.
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"The channel is highly cautious with taking on new inventory, contributing to low shipments in Q4. Backed by strong promotional incentives from vendors and channels, the holiday sales season helped reduce inventory levels."
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The sales data for phone brands has yet to be finalized, but according to preliminary information, Apple leapt to the front of the global sales race, taking market share of 25 percent. This was despite lockdowns in manufacturing facilities in China and shrinking demand in general.
Across the whole year, Apple's share of sales was 19 percent, up from 17 percent in 2021.
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For Apple's Q4 ended September 30, the iPhone generated more than $42 billion in sales, and was helped in part by a wave of customers upgrading to the iPhone 14 while brand switchers grew double digits.
[5]Second-hand and refurbished phone market takes flight amid inflation hike
[6]Next-gen Qi2 wireless charging spec seeded by Apple
[7]Here's something communism is good at: Making smartphones less annoying
[8]Only iPhone 15 Pro models will have higher data transfer speeds on USB-C – analyst
[9]Xiaomi reveals bonkers phone with bolted-on Leica lens that will make you look like a dork
According to Canalys, Samsung was pushed into second spot for the final quarter of 2022 but retained the lead for the whole of the year. The Chinese brands Xiaomi, OPPO, and Vivo rounded out the top five.
Phone makers are "cutting costs to adapt to the new market reality," said Canalys.
This is contrary to claims from Samsung Electronics vice chair Jong-hee Han, who said last month he wants to "strengthen the competitiveness of smartphones without getting caught up in cost reduction."
Price is the obvious weapon phone vendors wield when trying to improve demand for hardware, but offering price protection to third party sellers in the channel to cover discounts in an expensive business. It seems many used those levers already to clear down the decks in Q4. Apple will have more slack in the system than others to play with its prices.
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Canalys data indicates 1.2 billion phones were sold over the 12 months to 1.2 billion units, down 11 percent year-on-year. What a difference a year makes. ®
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Phones are now largely commodity items except for the more fashion sensitive. I imagine Apple get a small advantage from this as they ten to appeal to the more fashion sensitive group.
I wonder if it's still the case that Apple does better in the US and worse in Europe and other regions.....
(nothing against iPhones personally, I had a work one a couple of years ago and it was quite good, not so many apps but everything there was worked, at least among the things I was interested in)
Several factors
I believe several factors are contributing to this:
- cost of living crisis - leads to people delaying purchases of 'nice to have' items like the latest mobile phone, as well as driving people to 'cheaper' models
- market saturation - number of new users must be declining rapidly now with there being more mobile phone subscriptions than humans on the planet
- lack of step change innovation - once you have a smart phone, does a foldable screen or a marginally better camera provide enough mass appeal to get people to invest in a new phone
Investors, companies, countries and the planet in general needs to come away from the idea of infinite growth potential or infinite consumer need. Tactically, economists know that lowered prices will lead to an increase in demand. This is just not a game that can be played endlessly, either.
Never bought a new phone
I have always bought second hand, I never need the extra megapixel camera RIGHT NOW, I can always wait at least a year to get it far cheaper but typically I keep a handset for 3-4 years.
That sort of explains things...
Just bought a new phone - f'ing expensive, but I feel I got a decent deal (still a lot of money - caused by requirements like small size, dual sim, separate sd card slot, not too outdated). I actually had the predecessor on my list, but then got the current model for only a 15% markup (and under the MSRP, two months after the release).