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Global smartphone market to hit decade low; Apple could take top spot

TechnologyGlobal smartphone market to hit decade low; Apple could take top spot


Photo taken on Aug. 14, 2023 shows iPhones at an Apple store in Hangzhou, East China’s Zhejiang province. On the same day, data released by TechInsights showed that Apple’s iPhone sales in China surpassed the United States for the first time in the second quarter of 2023, becoming the largest single market for iPhone shipments. 

Costfoto | Nurphoto | Getty Images

Global smartphone shipments this year are on track to be the worst in a decade, Counterpoint Research said in a report on Thursday, as the market is dragged down by the U.S. and China.

However, Apple could become the biggest player in smartphones this year by shipments, as its high-end iPhone sales remain resilient, the report added.

Measuring expected demand, shipments are not equivalent to sales and represent the number of devices that smartphones vendors send to retailers.

Counterpoint Research said it expects smartphone shipments in 2023 to decline 6% year-on year to 1.15 billion devices.

“Asia is one of the major hurdles to positive growth, as headwinds halt the economic turnaround anticipated for China at the start of the year, and the broader region experiences intensifying declines across emerging markets,” Counterpoint said in its report.

China’s economy this year has sputtered and not lived up to expectations of a rapid recovery, while consumers remain cautious on spending.

Chinese smartphone purchases, which used to average 450 million devices a year at their peak, have shrunk to 270 million per year — contributing as a major cause behind the decline in global smartphone sales, Karn Chauhan, senior analyst at Counterpoint Research told CNBC via email.

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North America continues to dampen the global recovery, with a “disappointing” first half of the year setting the region up for double-digit full-year declines, Counterpoint’s report said.

“Despite strength in the jobs market and inflation falling, consumers are hesitant to upgrade their devices, pushing replacement rates for the US and globally to record highs,” the research firm said.

‘Apple in a good spot’

The premium end of the market with higher priced devices has remained quite resilient, despite a fall in overall smartphone shipments.

Apple is gearing up to launch its next flagship smartphone — the iPhone 15 — in September. That could give the company a strong showing going into the end of the year, Counterpoint said.

“But we’re watching Q4 (fourth quarter) with interest because the iPhone 15 launch is a window for carriers to steal high-value customers. And with that big iPhone 12 installed base up for grabs promos are going to be aggressive, leaving Apple in a good spot,” Jeff Fieldhack, research director for North America at Counterpoint Research, said in a press release.

Chauhan said the analyst firm expects Apple shipments to be up “marginally” year-on-year, given demand in markets like China and other Asian countries where there is a “growing premiumization trend” — meaning that people are willing to pay a higher price for phones.

Apple’s iPhone range helps Apple play in the premium segment of the smartphone market.

Counterpoint Research said that the U.S. company could this year take the top spot globally in terms of annual shipments for the first time ever. Samsung was the biggest player by market share in the second quarter of the year.

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“It’s the closest Apple’s been to the top spot.  We’re talking about a spread that’s literally a few days’ worth of sales,” Fieldhack said. “Assuming Apple doesn’t run into production problems like it did last year, it’s really a toss up at this point.”

Apple has made a push into new markets, with India being a focal point for the company in 2023, as it tries to capitalize on local consumers’ appetite for premium devices. The U.S. company opened its first physical stores in India this year, with CEO Tim Cook visiting the country.

Apple’s ability to grow in the market will also factor into whether it ends up as the number one smartphone maker this year, according to Chauhan.

“The reception of the iPhone 15 and growth in non-core iPhone markets will decide if Apple surpasses Samsung at the full-year level or not,” Chauhan told CNBC.


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