US Smartphone Shipments Decline in Q1 2023 Amid High Inflation, Inventory Correction; Apple Share Up

  • Shipments declined 17% YoY in Q1 2023 due to inventory correction and weak consumer demand.
  • Apple increased its market share to 53% in Q1 2023 from 49% in Q1 2022.
  • The uncertain economic outlook forced consumers to hold off on new device purchases.
  • Some niche categories like foldables may continue to perform well despite overall weakness.
  • Incumbent postpaid players may increase promotional activity during H2 to take on cable MVNOs.

Denver, Boston, Toronto, London, New Delhi, Hong Kong, Beijing, Taipei, Seoul – May 8, 2023

Smartphone shipments in the US declined 17% YoY in Q1 2023 as OEMs corrected high channel inventory and as consumer demand declined due to macroeconomic pressures. The market witnessed a dip in shipments across all major OEMs after registering a strong first quarter last year. However, Apple managed to increase its market share despite a YoY drop in its shipments.

Counterpoint-Research-US-Smartphone-Shipments-Q1-2023Counterpoint US OEM Share Q1 2023

Commenting on the situation, Research Analyst Matthew Orf said, “Inflation started impacting the US smartphone market in H2 2022, especially the low end where consumers have less disposable income and are more sensitive to changes in prices. Persistent inflation and an uncertain economic outlook are causing consumers to hold off on new device purchases, resulting in lower upgrade rates and fewer device sales, especially in the prepaid segment.”

The impact of inflation and other macroeconomic pressures on the market has been uneven. Senior Analyst Maurice Klaehne noted, “While prepaid brands saw significant YoY declines in shipments, there were some silver linings. Samsung’s Galaxy S23 shipments were up double digits YoY while the Galaxy A14 5G performed exceptionally well in prepaid. The gap between low-end and premium devices seems to be widening, creating a vacuum in the mid-range device category.”

Associate Research Director Hanish Bhatia noted, “Some niche categories may continue to perform well despite overall weakness. For instance, there is a lot of excitement around foldables this year as more OEMs jump onto the bandwagon, which may stir demand for premium devices. Similarly, demand from government-supported Lifeline and ACP programs will largely remain unaffected. But at a broader level, Android-to-iOS migration driven by young and first-time smartphone users continues to remain a key pain point among Android OEMs.”

Commenting on the direction of the US smartphone market, Director of North America Research Jeff Fieldhack said, “During Q1 2023, there was sluggish consumer demand with very low upgrades. We expect the incumbent postpaid players to increase promotional activity during the second half of the year to combat cable MVNOs, which saw higher net additions than the Big 3 during the quarter, a first for the US market.”

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Matthew Orf

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Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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Further Reading: 

Global Smartphone Market Declines 14% YoY in Q1 2023; Apple Records Highest-Ever Q1 Share

China Smartphone Sales Fall 5% YoY in Q1 2023; Apple on Top with Highest Sales Share

India Smartphone Market Records Highest Ever Q1 Decline of 19%, 5G Smartphones Contribution at 43%


Global Smartphone Shipments Share – Last Eight Years of Winners & Losers

Global Smartphone Shipments Share – Last Eight Years of Winners & Losers

Published date: March 1, 2023

Source : Counterpoint Research Market Monitor


Brand 2015 2016 2017 2018 2019 2020 2021 2022
Samsung 22% 21% 20% 19% 20% 19% 20% 21%
Apple 16% 14% 14% 14% 13% 15% 17% 18%
Xiaomi 5% 4% 6% 8% 8% 11% 14% 12%
OPPO 3% 6% 8% 8% 8% 8% 10% 9%
vivo 3% 5% 6% 7% 8% 8% 9% 8%
Huawei 7% 9% 10% 14% 11% 10% 2% 2%
  • The global smartphone market declined 19% YoY to reach 302.6 million units in Q4 2022.
  • India’s smartphone shipments dropped 30% YoY and 31% QoQ. The decline in entry level and budget segments which faced supply constraints in beginning of year and then witnessed lower demand throughout the year.
  • China smartphone market dropped 16% YoY but grew 2% QoQ in Q4 2022. Apple market share in China increased to 22% to become China’s biggest OEM.
  • LATAM’s smartphone shipments dropped 14% YoY but increased 6% QoQ. In 2022, Samsung and Motorola emerged as the leading smartphone brands in LATAM, capturing 39% and 24% market share respectively – a testament to their strong foothold in the region’s mobile industry.
  • Apple registered its highest shipment in North America to reach 22.3 million followed by China with 15.7 million units.

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Smartphone Price Observations for 2021 and Outlook for 2022

Global inflation of goods due to supply chain issues, rising energy prices, labor shortages and higher input costs has also made an impact on the handset market and will continue to keep prices inflated through 2022. In 2021, smartphone prices spiked globally but the inflation will be felt differently in various regions across the world.

North America
  • 10% YoY ASP increase in first three quarters of 2021 due to increased shipping and component costs.
  • Pre-paid segment experiencing more shortages as OEMs place more importance of producing high-end models.
Latin America
  • 4.7% YoY ASP increase in first three quarters of 2021, region seeing the worst inflation in 15 years.
  • Local currency depreciation having a significant impact on ASPs, Samsung being the only OEM to sell devices in local currency giving them a competitive advantage.
  • 70% of customers need a payment plan in order to afford a smartphone, this is leading retailers to incorporate ‘hidden inflation’ in customers payment plans.
Southeast Asia
  • 2.0% YoY ASP increase in first three quarters of 2021, smallest amount of inflation compared to other regions and not expected to change much in 2022.
  • OEMs are keeping prices as low as they can and will continue to do so, unless other macro factors like COVID-19 ramps up again in this region, that may affect ASPs in 202 depending on the impact on current supply chains.
Middle East and Africa
  • 17.4% YoY ASP increase in first three quarters of 2021, the highest inflation globally at close to 8% as foreign exchange rates drop due to pandemic impacts on some key markets.
  • Supply disruptions for major Android vendors caused an impact on the distributers bottom line that forced these OEMs to pass the cost onto the customers.
  • Lowest price ranged devices felt the most impact of inflation, as OEMs are once again placing more importance on the supply of higher-priced handsets. This is causing customers with lower income hesitant on buying the latest phones.
  • There is also the expectation of more VAT or higher import taxes on handsets in the near future due to government policies to combat depreciating domestic currencies.
  • 10.2% YoY ASP increase in first three quarters of 2021 due to shortages and supply issues as well but there was a GST hike in India during 2021 that added to the price of handsets in India.
  • OEMs are developing ‘creative pricing’ to hide the price increases by device as a newer version without upgrading specs and then selling at a higher price point.
Smartphone Chipset Observations and 2022 Outlook

Wafer prices at matured nodes have increased by 25%-40% between 2020 and now, likely to rise another 10%-20% in 2022. Advanced/leading edge nodes are not expected to rise since companies like TSMC and Samsung and more focused on cost-down execution to maintain profitability.

TMSC announced it will raise wafer prices from the beginning of 2022, this strategy implying a stronger demand going forward with tight supply lasting for the next few quarters. Smartphone OEMs will suffer the most on profit if they cannot balance the prices of handsets to customers. 5G growth may slow down in 2022 while the low-end and mid-end markets will face more difficulty as priority will be put onto high-priced smartphones that bring in a higher profit margin.

OEMs have been reluctant in 2021 to increase prices significantly with the fear of losing market share, so other strategies will be taken in 2022 to maintain costs. OEMs now must get creative in where to offset the cost of more expensive components. Xiaomi, for example, has taken steps to reduce the promotions on their handset devices to combat the increased prices of components. Some OEMs may have been prepared by stockpiling components at the beginning of the pandemic to offset the price increase. Many handset OEMs were not prepared in that sense, so the plans have been turned to reducing the Bill of Materials (BoM) costs in 2022 to offset the higher component cost and additional inflation.

For full report by Yang Wang, please see: Smartphone Price Observations for 2021 and Outlook for 2022

Apple Captured 43% of the Global Premium Segment, OnePlus Entered Top Five Premium Android OEMs During Q2 2018

According to Counterpoint Research’s Market Monitor Q2 2018, the global premium smartphone segment** grew faster than the overall smartphone market. This was driven by increasing shipments from Chinese players, which have recently upgraded their flagships and are positioning them at a higher price point, at launch, compared to their previous flagship models. As these players grow outside China, premium portfolio can help them tap the developed markets like Western Europe or USA where they were unable to expand their reach previously.

Market Summary:

  • The global, premium smartphone segment grew faster (+7%) than the overall smartphone segment (-1%) in Q2 2018. Growth was driven by increases in shipments of Chinese players like OPPO, Vivo, Huawei, OnePlus and Xiaomi.
  • The premium smartphone segment contributed to one fifth of the global smartphone market during Q2 2018.
  • Close to 40 OEMs compete in the premium segment globally, out of which the top five players account for almost 88% of the sales.
  • Apple led the global premium smartphone segment capturing 43% share of the segment, followed by Samsung (24%), OPPO (10%), Huawei (9%), Xiaomi (3%) and OnePlus (2%).
  • Even within the premium segment, the $400-$600 price-band, was the sweet spot as it contributed to 45% of the total premium segment sales by volume.
  • 95% of premium smartphone OEMs have a presence in the $400-$600 segment. Going forward we expect that competition in the $400-$600 segment will increase as Chinese brands, with their flagship offerings, are planning to expand their presence further.
  • Oppo led the $400-$600 segment with 22% share followed closely by Apple (22%), Samsung (16%), Huawei (14%), Xiaomi (6%) and OnePlus (5%)
  • OnePlus was one of the fastest growing brand in the $400-$600 segment. OnePlus sales were driven by India, China and UK. In India it surpassed Apple and Samsung to become the #1 premium smartphone OEM during the quarter with a strong 40% market share. It was also amongst the top five premium smartphone OEMs in France (#4), Germany (#4), Italy (#5), Netherlands (#4), Sweden (#3) and UK (#4) due to strong initial sales of the OnePlus 6.
  • In the $600-$800 segment, Apple and Samsung alone contributed to 85% of the shipments while Huawei trailed by a big margin.
  • In the $800+ segment, Apple clearly dominated with 88% share during the quarter.
  • Brands like OPPO, Vivo and Huawei have tweaked their designs by adding new features, at a time when overall innovation within smartphones was already reaching its peak. Examples include the Vivo Nex (Ultra Full View Display, In-display fingerprint), OPPO Find X (Ultra Full View Display) and Huawei P20 Pro (Triple camera).

Exhibit 1: Premium Smartphone Segment Competition Trends Across Price Tiers*

Premium Smartphone Segment Competition Trends Across Price Tiers

Source: Counterpoint Research Market Monitor Q2 2018

  • Among the key Chinese brands in the premium segment, Huawei and OnePlus were the only brands with wider geographic reach. More than 95% of flagship sales for OPPO, Vivo and Xiaomi happened in China, while Huawei and OnePlus flagship sales grew in parts of Europe.
  • Apple and Samsung sales were driven by developed markets like USA, China, Japan, Korea and countries in Western Europe. Samsung’s share in the $600-$800 segment declined due to fewer than expected sales of the Galaxy S9 series.
  • Below are the top five brands in the premium segment by different regions:

Exhibit 2: Premium Smartphone Segment Rankings of OEMs by Regions

Table of Premium Smartphone Segment Rankings of OEMs by Regions

Source: Counterpoint Research Market Monitor Q2 2018

Going forward, we estimate that the premium smartphone segment is likely to be more competitive. We further expect that vertically integrated companies will leverage their expertise to gain share in the segment. With 5G around the corner and players like Apple pushing the price points higher, Chinese OEMs have a good chance of entering new price tiers in the premium segment to drive both increased revenue and profit.

*Pricing analysis is based on wholesale pricing

** Premium segment >$400

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