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Time to buy a phone as shops use discounts to clear out inventories
More stock is NOT wanted as shipments plunge to lowest point in decade, Apple floats to top
Against a backdrop of rising inflation and a less than certain economy in various parts of the world, the volume of global phones shipments is at the lowest rate in a decade.
According to preliminary findings from tech analyst Canalys, sales into the channel – tech retailers, distributors and the like – fell by a whopping 17 percent in the final three months of last year as buyers reduced wholesale purchases to clear existing inventories in anticipation of slowing sales to end users.
"Smartphone vendors have struggled in a difficult macroeconomic environment throughout 2022. Q4 marks the worst annual and Q4 performance in a decade," said research analyst Runar Bjørhovde.
"The channel is highly cautious with taking on new inventory, contributing to low shipments in Q4. Backed by strong promotional incentives from vendors and channels, the holiday sales season helped reduce inventory levels."
The sales data for phone brands has yet to be finalized, but according to preliminary information, Apple leapt to the front of the global sales race, taking market share of 25 percent. This was despite lockdowns in manufacturing facilities in China and shrinking demand in general.
Across the whole year, Apple's share of sales was 19 percent, up from 17 percent in 2021.
For Apple's Q4 ended September 30, the iPhone generated more than $42 billion in sales, and was helped in part by a wave of customers upgrading to the iPhone 14 while brand switchers grew double digits.
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According to Canalys, Samsung was pushed into second spot for the final quarter of 2022 but retained the lead for the whole of the year. The Chinese brands Xiaomi, OPPO, and Vivo rounded out the top five.
Phone makers are "cutting costs to adapt to the new market reality," said Canalys.
This is contrary to claims from Samsung Electronics vice chair Jong-hee Han, who said last month he wants to "strengthen the competitiveness of smartphones without getting caught up in cost reduction."
Price is the obvious weapon phone vendors wield when trying to improve demand for hardware, but offering price protection to third party sellers in the channel to cover discounts in an expensive business. It seems many used those levers already to clear down the decks in Q4. Apple will have more slack in the system than others to play with its prices.
Canalys data indicates 1.2 billion phones were sold over the 12 months to 1.2 billion units, down 11 percent year-on-year. What a difference a year makes. ®