The smartphone industry is facing its worst market drop since the pandemic started when its shipments fell by 11% due to "unfavorable economic conditions" and slow seasonal demand in the first quarter of 2022, based on Canalys' report.

Galaxy
(Photo : Kelly Sullivan/Getty Images for Samsung Electronics America)
SAN FRANCISCO, CALIFORNIA - FEBRUARY 11: Samsung Head of US Mobile Product Management Drew Blackard speaks onstage at Samsung's Galaxy UNPACKED at The Palace of Fine Arts on February 11, 2020 in San Francisco, California.

Shipments drop, Samsung rises up

Despite the market drop, Samsung was still able to increase its growth by amassing a 24% market share, which is up from 19% in Q4 2021. This increase is attributed to the launch of its mid-range smartphones and the release of the Galaxy S22 series.

Apple lags behind in second place with an 18% share, a three percent drop from last quarter but still a solid run due to the growing demand for iPhone13, according to Canalys.

The 5G touting iPhone SE also became an "important mid-range volume driver" for the company since it provided an upgraded chipset and a better battery performance. Canalys claimed this despite reports saying that there was weak demand for the smartphone.

Meanwhile, Xiaomi kept its third-place position with a 13% market share, a one percent increase from last quarter. Oppo also retained the fourth spot by having 10% of the shares, and the fifth spot is held by Vivo with 8% of the market share in smartphone shipments.

Canalys Analyst Sanyam Chaurasia noted that the Chinese vendors had low market shares since their worldwide expansion was held back by a slowdown in their domestic market.

In fact, Bloomberg's report noted that the weakening smartphone could be attributed to the drop in China's  quarterly production of semiconductors since early 2019 due to softened electronic demands from consumers and the tightening of COVID-19 lockdowns.

In contrast with the Q1 report from last year, Samsung's share rose significantly by two percent, Apple had a three percent growth, Xiaomi and Oppo declined by one percent, and Vivo dropped by two percent.

The Q1 report stated that Apple had the highest shares last year since it was driven by a stellar demand for iPhone13 and particularly by its performance in Mainland China.

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"Unsettled business environment"

Canalys, an independent analyst company, said that the global smartphone industry was deterred by an "unsettled business environment."

 "Markets saw a spike in COVID-19 cases due to the Omicron variant, though minimal hospitalizations and high vaccination rates helped normalize consumer activity quickly. Vendors face major uncertainty due to the Russia-Ukraine war, China's rolling lockdowns and the threat of inflation," said Canalys VP Mobility Nicole Peng.

She added that these factors, along with a traditionally sluggish seasonal demand, contributed to the market drop. She advised vendors to be equipped with responding quickly "to emerging opportunities and risks while staying focused on their long-term strategic plans."

However, Peng remains optimistic that component shortages will eventually ease and improve sooner than expected, which is something that electronic makers have been facing since the beginning of the coronavirus pandemic.

Related Article: Samsung Galaxy S22 Vs. iPhone 13: Possible Advantages of Apple's Upcoming Smartphone Competitor

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Written by Joaquin Victor Tacla

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