On January 27, Counterpoint Research, a global research firm, released its sales report for China’s smartphone market in 2022. The country’s smartphone sales declined 14% year-on-year in the previous year and reached their lowest level in a decade, recording their fifth consecutive year of decline.
The report pointed out that macroeconomic headwinds and the impact of COVID-19 caused the sales of smartphones to plummet. Although the sales of Apple’s iPhone, vivo, OPPO, Xiaomi and other brands have declined to varying degrees due to the slowdown in market sales, the decline of the iPhone was far smaller than that of other brands.
Vivo has maintained the topmost position in the Chinese market with a market share of 19.2%. Apple, OPPO, Honor, Xiaomi, Huawei, and realme ranked second to seventh with market shares of 18%, 17.5%, 16.7%, 13.9%, 7.9% and 2.4% respectively.
In 2022, Apple declined 3% YoY but was able to outperform the market to become the second largest brand in China for the first time for a full year. It also reached its highest-ever quarterly share, capturing 23.7% of the sales in Q4 2022. Due to the decline in demand, the sales volume of vivo, OPPO and Xiaomi in 2022 decreased by 23%, 27% and 19% respectively. In contrast, Honor was the only brand to show positive growth throughout the year, up 38% year-on-year, though the main reason for the growth was a lower base in 2021.
Huawei also recovered from its 2021 slump with the return of the Mate50 series, growing 15% year-on-year in the fourth quarter. However, Huawei mobile phones still do not support 5G.
Data from IDC, another research organization, also points to a downturn in China’s mobile phone market. In 2022, the country saw about 286 million units shipped, down 13.2% year-on-year, the largest decline in history. Guo Tianxiang, a senior analyst at IDC China, pointed out that, although the epidemic in 2022 had a great impact on China’s smartphone market, in essence, the epidemic only made it worse. Before the outbreak in 2020, China’s smartphone market had already begun to decline so the outbreak only added fuel to the flames.
From December 2022 to early January 2023, domestic mobile phone companies hosted nearly 10 press conferences with the intention of attracting consumers during the Spring Festival holiday. Trade-ins have been one way companies have been promoting consumer upgrades. According to the Times Weekly, shop assistants at vivo and Huawei said that trade-in activities during the Spring Festival holiday will garner an additional 100 yuan to 200 yuan subsidy. Further, many older models have already reduced their prices. For example, Xiaomi‘s foldable model reduced its price by 2,000 yuan, while vivo’s S9e series dropped its price by 500 yuan and quickly sold out.
It’s not just the Chinese market that has experienced a sharp fall. Canalys, a market research organization, mentioned that the fourth quarter of 2022 was the worst quarter of the worst year in the global smartphone market in the past decade. Throughout 2022, less than 1.2 billion smartphones were shipped worldwide.
TrendForce predicted that smartphone inventories are expected to return to a healthier level in the second quarter of 2023, and production will also improve. However, due to inflation and geopolitical conflicts, the growth rate of smartphone production will still be limited to 1% to 3% in 2023.