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2022 was a tough year for gadget makers and ancillary industries as both PC and smartphone sales tumbled. Apple meanwhile retained the top spot and outperformed other smartphone companies.

According to the preliminary data from the IDC (International Data Corporation) global smartphone shipments fell 18.3% YoY to 300.3 million units in Q4 2022. In the full year, smartphone shipments fell 11.3% to 1.21 billion units.

The IDC said that in absolute terms, the global smartphone market contracted to the lowest level since 2013. Also, the 18.3% fall in Q4 shipments is the largest on record. IDC blamed the fall in shipments on “significantly dampened consumer demand, inflation, and economic uncertainties.”

The report said that Apple retained its top slot and if anything, its market share rose to 24.1% in Q4 2022 as compared to 23.1% in the corresponding quarter in 2021. Samsung also retained its second position and its market share also rose from 18.8% to 19.4%.

Among Chinese smartphone companies, while Oppo’s market share rose from 8.2% in 2021 to 8.4% in 2022, Vivo’s market share fell from 7.7% to 7.6% over the period. Xiaomi’s market share fell steeply from 12.2% to 11% but the company retained its position as the third largest smartphone company globally.

The steep decline in Q4 shipments coincides with holiday shopping in the Western world where festive shopping tends to spur sales.

Commenting on the anomaly Nabila Popal, IDC’s research director said,” We have never seen shipments in the holiday quarter come in lower than the previous quarter. However, weakened demand and high inventory caused vendors to cut back drastically on shipments.”

Apple Witnessed Supply Chain Issues in Q4 2022

Along with the demand scare, Apple also faced supply chain issues in Q4 2022 due to the COVID-19 outbreak at a key Foxconn plant that produces most of the iPhones globally. In its report, IDC said, that Apple “suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China.”

Apple stock lost nearly 28% last year and underperformed the S&P 500. It was however the best-performing FAANG stock of the year and the only one to outperform the Nasdaq Composite. There is a guide on how to buy Apple stock.

Coming back to the IDC report, it said that refresh rates have risen past 40 months in most markets. It is circumspect on the 2023 demand environment and said that the expected 2.8% growth looks in “serious jeopardy.”

Smartphone Market Could Face Turbulence in 2023 Also

The report said, “With 2022 declining more than 11% for the year, 2023 is set up to be a year of caution as vendors will rethink their portfolio of devices while channels will think twice before taking on excess inventory.”

It added, “However, on a positive note, consumers may find even more generous trade-in offers and promotions continuing well into 2023 as the market will think of new methods to drive upgrades and sell more devices, specifically high-end models.”

Meanwhile, the fall in PC and smartphone sales has also taken a toll on chipmakers. Yesterday, Intel posted a dismal set of numbers for the fourth quarter of 2022 and missed both revenue and profit estimates by a wide margin. Its guidance for the first quarter of 2023 also missed estimates.

Apple to Report Earnings Next Week

Apple would release its earnings for the first quarter of the fiscal year 2023 next week. Markets would closely follow the earnings for commentary on iPhone demand amid a slowing market. Wall Street analysts expect Apple to report a quarter fall in revenues.

During the previous earnings call, Apple had said that its revenue growth in the December quarter would be lower than the September quarter. However, analysts have toned down their expectations amid both demand and supply issues.

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