Global Smartphone Market in Decline: The Impact of Inflation and Pandemic

February 3, 2023

The global smartphone market is in decline, with the latest data from Omdia’s smartphone preliminary shipment report showing a 15.4% fall from the previous year. The major smartphone manufacturers have all seen a decline in shipments, with even Apple experiencing a double-digit hit. Apple recorded the most shipments of any OEM with 74 million, but still saw a YoY fall of 13.3%. Despite this, Apple’s market share has increased from 24% in 4Q21 to 25% in 4Q22.

Samsung, the second largest OEM, has also seen a YoY fall of 15.4% with 58 million shipments in 4Q22 compared to 69 million in 4Q21. Meanwhile, the major Chinese OEMs, including Xiaomi, Vivo, and Oppo, have recorded a decline of more than 25% in the fourth quarter compared to the previous year. Oppo Group saw the largest fall with a 29.1% decrease in shipments, while Realme saw the biggest YoY fall with a 31.5% decrease.

“A variety of things are causing the continued slump in Chinese OEM shipments, including a local economy recession, pandemic-related lockdown of major Chinese cities, and the sudden abandonment of the Zero-Covid policy has brought confusion to the market. Internationally, high inflation is cutting consumers’ disposable incomes, which negatively impacts Chinese OEMs who primarily target the low to mid-end price range. Many Chinese OEMs also continue to struggle in the Indian smartphone market, the largest international market for a number of brands. An unintended consequence of this reduction in demand was a significant increase in inventory. As a result, it is not surprising that OEMs are downgrading their shipment targets for each quarter, with this likely to continue for at least another two quarters.” said Zaker Li, Principal Analyst at Omdia.

The decline in the smartphone market can be attributed to a variety of factors, including a local economy recession, pandemic-related lockdowns in major Chinese cities, and high inflation which is cutting consumers’ disposable incomes. This reduction in demand has particularly impacted Chinese OEMs, who primarily target the low to mid-end price range.

However, some Chinese OEMs have been more resilient, such as Transsion and Honor, who have seen a smaller YoY fall than others. Despite this, the overall trend in the smartphone market is a continued slump, with the pandemic and inflation affecting both domestic and international markets.

Hong concludes: “As forecasted by Omdia, OEMs’ shipments and targets have fallen, with many OEMS including Apple and Samsung falling further than predicted. So much is at play effecting consumer demand for smartphones, but the key driver is inflation squeezing wage packets and reducing disposable income. A strong dollar against other currencies also discourages OEM’s profitability and dampens promotions and marketing activities. On the production side, high inventories and low demand is resulting in continued reductions in production volumes. It will take time for the market to recover, with an increase in shipments unlikely until at least the third quarter of 2023.”

In conclusion, the global smartphone market is in decline, with major OEMs experiencing a fall in shipments YoY. The decline can be attributed to a combination of factors, including the pandemic, local economy recession, and high inflation. Despite this, some Chinese OEMs have been more resilient, but the overall trend in the market is a continued slump.


The recent findings by Omdia regarding the global smartphone market paint a bleak picture for the industry. With a 15.4% decrease in shipments YoY and even major players like Apple experiencing double-digit falls, it’s clear that the industry is facing significant challenges. This news is particularly concerning for London-based startups that are looking to enter the smartphone market or have already established themselves in it.

For startups, the current situation in the smartphone market represents a challenging landscape, with the major players feeling the pinch and more competition for market share. This can make it harder for new entrants to gain a foothold and grow their business. The drop in demand for smartphones and the squeeze on consumers’ disposable incomes due to inflation can also impact the purchasing power of potential customers for these startups.

Additionally, the COVID-19 pandemic and the lockdowns that resulted from it have caused significant disruption to the supply chain, with production suspensions at key manufacturing plants like Foxconn impacting the ability of startups to get their products to market. This presents a significant challenge for these businesses as they seek to secure funding, grow their customer base, and establish themselves in the market.

Despite these challenges, there is still hope for London-based startups in the smartphone market. For example, the early demand and customer feedback for the latest iPhone 14 Pro and 14 Pro Max has been strong, indicating that consumers are still interested in high-end, premium products. This presents an opportunity for startups that are able to offer unique and innovative products that stand out from the competition and meet the demands of consumers.

Moreover, with the decline of major Chinese OEMs, there is an opportunity for startups to take advantage of this by offering products that fill the gap in the market left by these brands. For example, companies that are able to offer a high-quality, affordable smartphone that targets the mid to low-end price range could find success in the current market conditions.

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