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Selling Fewer Smartphones: What’s Going On?

In recent years, the smartphone market has experienced remarkable growth. Despite the significant effects of confinement and suspensions in Chinese factories because of it, the epidemic could not even touch it. But inflation and the economic crisis fueling the war seem to be affecting this market.

Because statistics about smartphone sales around the world still affect us. These are getting worse, and the truth is, there are fewer smartphones for sale than ever before. There may be various reasons for this, but there are two main ones.

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There is no denying that the smartphone market is in a complete recession, as evidenced by the fact that the market has already contracted for three consecutive quarters compared to the same period last year. Sales for this market segment over the past few months, Canalys reported, could not be worse. The fact that this market hasn’t been that bad since the third quarter of 2014 gives us an idea of ​​how bad the situation is now.

It’s clear that a downward trend is already starting to become the norm with regards to the last third quarter of 2022, as evidenced by Canalys, it has shrunk by 9% compared to the same period last year. The steady ups and downs of sales for the top five manufacturers have stabilized this time around, according to a chart comparing the evolution of brands from the first quarter of 2020 to the third quarter of this year.

The extraordinary annual growth that we observed in this market during the first quarter of 2021, when the pandemic began to slow, no longer exists. This growth undoubtedly capped the market’s sales for three years. Now, it is clear that fewer smartphones are being sold than ever before. This can be explained in several ways because a variety of factors contribute to the market decline.

Why are smartphone sales steadily declining?

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Although we do not logically have all the answers, we can develop a completely correct idea of ​​the reality of the market which, without a doubt, can shed light on the real reasons behind the collapse of this market. The economic crisis is the result of all causes combined. We are currently facing a very difficult economic environment. Which experts predict will not be as severe as the 2008 financial crisis. But it is already having a huge impact on consumers.

On the one hand, there is the inflation crisis. Which started before February of this year and started giving hints of what might happen. It is logical to assume that all these expenditures are transferred first to raw materials and then to consumers given the current inflation of about 10%. Moreover, the decrease in consumer purchasing power has a greater impact on sales than the increase in smartphone prices, which, with the exception of rare cases, were not particularly severe.

The more resources that must be consumed, the more purchases must be made on the basis of sacrifice. Obviously, nonessential purchases are the first thing to give up, as is the bulk of technology. As a result, the turnover of models in the market has slowed down. Which gradually leads to this state of declining sales, which at this time shows no signs of improvement. However, there are two other important reasons for this economic disaster, which is already affecting the majority of us.

One is the conflict in Ukraine, which has clouded the market for months. And the power problem that resulted from it. And all of this culminates in that inflation, which is ultimately the cause of the disruption of our collective goals. Families and all consumers, in general, are forced to abandon products such as smartphones unless they are absolutely necessary due to forced replacement or professional reasons, given this combined with the inflation we are sucked into.

It is clear that those who do not see an increase in their income do not plan to invest in technology such as the smartphone. There may be other factors at play. But it is clear that sales in this case will only deteriorate over the following months. Don’t forget that the lack of ingredients on the market since the pandemic has had a negative impact on sales. Just like you did in the auto industry. Longer delivery times result from fewer components, which reduces sales.

When will smartphone sales start to increase again?

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“The global smartphone market contracted for the third consecutive quarter during the three-month period ending September 30. This resulted in the worst third quarter since 2014. In its preliminary smartphone market report for the third quarter, Canalys said the overall market was down 9 percent based on Annual.-Year. Thanks in part to the uncertain economic environment in which consumers delay buying electronics and prioritize spending on other necessities,” Canales says.

We all ask ourselves this question, and the answer is ambiguous. Most analysts expect an improvement in the market by the end of 2023. They believe that it will coincide with a slowdown in inflation. Thus, the efforts of central banks to fight it by specifically calming the economy. Smartphone sales will not resume until demand has fully returned and prices have generally started to fall. Due to the fact that it is not an essential expenditure in the current complex social and economic environment, it will continue to experience declines.