2022 smartphone shipment projection was reduced after a disappointing Q3

According to the sources, it states that in 2022, smartphone shipments will decline year over year for the first time, except the first Covid-affected year of 2020, as a result of a weaker-than-anticipated holiday season, forcing market trackers to decrease their yearly outlook for the year.

Conditions Dragging down the Demand

IDC India currently forecasts an 8–9% year-over-year decline, whereas Cybermedia Research (CMR) estimates a decline of 5%, Counterpoint Research and Strategy Analytics each forecast a 3% decline, with the macroeconomic environment still having a negative impact on demand, particularly for high-volume entry-level smartphones.

The shift toward high-end, high-performance handsets during the holiday season, which has increased the average sales price to record levels, is expected to boost revenue, according to analysts.

Smartphone sales volumes have never decreased, according to Navkendar Singh, associate vice president at IDC India. The only time it fell was in 2020, the pandemic year when sales ceased as a result of lockdowns.

Weak Demand and Increasing Prices

Despite the beginning of Diwali celebrations earlier than expected, the market tracker has reduced its projections from 160 million to 150 million devices due to the lowest third-quarter shipping since 2019. It further stated that holiday shopping was hampered by weaker demand and rising prices.

Singh noted that Chinese smartphone firms’ innovations in the entry-level market fueled the expansion in the first years of the previous decade. Inflationary pressures on customers at the bottom of the pyramid, higher pricing, and a delayed switch from feature phones to smartphones all had an impact on the industry in 2022.

Compared to early forecasts of 174 million units, CMR India now predicts a 5% reduction in annual shipments to 165 million units. Abhilash Kumar, an analyst at Strategy Analytics, who predicts that shipment volumes will decline to 158 million units in 2022, said that the smartphone market performed worse than anticipated and is predicted to decline 3% YoY due to economic headwinds like rising crude oil prices, inflation, recession concerns, a bearish stock market, and INR depreciation.

About the Smartphone Shipments

The yearly shipment forecast by Counterpoint Research has decreased from 175 million units earlier in the year to 163 million units today. According to Tarun Pathak, research director at Counterpoint Research, individuals hung onto their smartphones for longer due to macroeconomic concerns and a lack of excitement in the entry-level market. Upgrade cycles, which were formerly between 23 and 24 months, have increased to 28 to 29 months.

Although annual volume sales are predicted to decline, revenues from smartphones are at an all-time high due to increased average selling prices, which experts believe is a sign that consumers are choosing better upgrades to premium, high-performance devices.

According to Counterpoint Research, the top three smartphone manufacturers in 2022 will be Samsung, Apple, and Xiaomi, with annual smartphone sales revenues increasing by 4%. According to IDC India, as a result of consumers rising the price ladder to purchase more expensive handsets, smartphone average selling prices reached a record $226 during the festive quarter, increasing by 15% on a year-over-year basis and 6% on a quarterly basis.

Xiaomi India, which generates volumes in the sub-$100 bracket, witnessed shipments decreased by 18% year over year in the third quarter, according to IDC India. This was reflected in the market shares of smartphone brands.

As per Counterpoint Research, the iPhone 13 became the first iPhone to top overall smartphone shipments in India in a quarter, helping luxury smartphone brand Apple achieve its greatest market share of 5% during the quarter.

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