More struggles with smartphones, as reports come in Q2. According to Canalys, global shipments fell 9% for the quarter, reversing a brief recovery for the category, whose woes were only amplified by the pandemic, subsequent shutdowns, supply chain issues and continuing economic uncertainty.
The 287 million units mark the lowest figure since the second quarter of 2020, when the pandemic began. Interestingly, the confluence of long-standing concerns has resulted in new issues, namely oversupply. The slowdown in interest has burdened companies with stock back on older models.
“Supply chain shortages are no longer the most pressing issue as component orders are rapidly reduced and suppliers begin to worry about oversupply,” analyst Tony Zhu said in a statement. “This has resulted in price reductions for key components, reducing costs for suppliers. Vendors could use the additional savings to improve product competitiveness of new launches in the second half. At the same time, it could make it even more difficult to dispose of older models. The oversupply situation demands more of the suppliers’ planning capabilities than the shortage period. »
There have been a lot of corrections in the industry, coupled with a fair amount of uncertainty. A category that has effectively trained consumers to anticipate annual specification updates also understandably has difficulty moving older models. Device makers will, of course, continue to adopt a range of different strategies to deal with the crisis.
Samsung is doing the best, retaining first place with 21% of the market. The company has largely focused on the budget A-series – after all, people still need phones, even if inflation and uncertainty have made buying $1,000 flagships widely untenable. On the other hand (so to speak), the company also continues to push its expensive foldable strategy as the way forward.
Samsung is expected to announce a pair of new devices next month. The company claims to have shipped nearly 10 million foldables in 2021 alone.
Apple, meanwhile, held on to second place thanks to the enduring strength of the iPhone brand. The iPhone 13 defied expectations as the company highlighted an uptick in revenue in last night’s earnings report, defying broader economic headwinds. A good indication, perhaps, of the maintenance of consumer confidence, despite macroeconomic trends. Earlier this week, a report noted that the Chinese market had seen a sharp 14.2% drop in sales, due to shutdowns and declining consumer confidence.