The Smartphone Industry Expects Innovated Growth

By Yan Han

According to public data， about 255 million smart phones were sold in Chinas market in 2022， down 19% from the year of 2021. This situation was not specific to China alone， because according to the IDCs research report， the global smartphone sales in 2022 were not ideal. The global shipment volume in the fourth quarter of 2022 was only 300.3 million units， down 18.3% from 367.6 million units in the fourth quarter of 2021. The total annual sales volume fell from 1.3598 billion units to 1.2055 billion units， down by 11.3%. This was the lowest annual shipment volume since 2013.

Declining sales for key industrial players

The top 5 players of the smartphone industry are Apple， Samsung， Xiaomi， OPPO and Vivo. The smartphone sales of these five players have been declining in 2022. Take Q4 sales for example， Apple saw its shipment down by 14.9% to 72.3 million units， Samsungs shipment decreased by 15.6% to 58.2 million units. Xiaomi， OPPO and Vivos sales volume reached 33.2 million units， 25.3 million units and 22.9 million units， down by 26.3%， 15.9% and 18.9% respectively.

From the annual perspective， Samsung ranked first in terms of sales volume， reach 260.9 million units， down by 4.1%； Apple ranked second with the shipment of 226.4 million units down by 4%. Xiaomi， OPPO and Vivo saw double-digit decrease， down by 18.8%， 22.7% and 22.8% respectively. Their annual sales were 153.1 million units， 103.3 million units and 99 million units.

Sanyam Chaurasia， analyst of a global technology market analyst firm Canalys， said， “At the end of 2022， the shipments of major markets fell sharply， and both Samsung and Apple were hit hard. Although there were some signs of stabilization in the third quarter， the market performance of the Asia-Pacific region and Europe in the fourth quarter of 2022 was the worst ever. The piling inventory in the top-tier markets， such as India and Chinese Mainland， led to disappointing market performance in the last quarter of 2022. At the same time， the economic downturn also led to a decline in consumer spending in North America and Latin America. As retailers and telecom companies are unwilling to increase their inventory levels， manufacturers must carefully plan the release of their new products.”

Uncertainties for market recovery

Canalys analyst Le Xuan Chiew said that looking forward to 2023， Apple and Samsung will be better able to cope with the uncertainties based on their dominant position in the high-end market. On the other hand， Chinese manufacturers are still vulnerable to the downward trend of the international market and the brutal competition in the domestic market. In addition to poor demand， channel inventory， profit pressure and operational efficiency will also pose challenges to Chinese manufacturersexpansion strategy.

Canalys analyst Amber Liu said that the year 2023 will be full of difficulties. Recent macroeconomic trends show that the risk of global economic recession is increasing. The recovery of the smartphone market is full of uncertainty. Manufacturers and sales channels will pay close attention to market dynamics and maintain a cautious attitude. Smaller manufacturers must focus on finding opportunities through streamlined product portfolio and efficient channel management to ensure profitability. On the other hand， popular brands will explore how to promote demand through their established internet of things ecosystem， differentiated high-end products， and effective channels and promotion strategies.

Foldable phones and vehicle apps expected to offer new business opportunities

As demands for smartphone replacements have weakened， domestic manufacturers have shifted their focus on product innovation in the fields of foldable smart phones and vehicle apps. However， foldable smart phones and vehicle apps are difficult to become new growth points for domestic manufacturers in a short time.

Regarding the foldable smartphone market， only Samsung has sold about 10 million units last year. In the domestic market， about 2.83 foldable smartphones were sold in 2022， up by 144.4%， according to CINNO Research. If calculated by each quarter， the sales of foldable smartphones have been increasing for 9 consecutive quarters.

The Q3 report of 2022 released by Counterpoint Research， a market research institute， showed that the global shipments of foldable mobile phones increased by 63% yearon-year. The foldable phones of Samsung， Vivo， OPPO， Xiaomi， Honor， Huawei and other brands have brought new highlights to the market.

Since the invention of the foldable phone， cracked screens and durability problems have let customers down. As major manufacturers keep improving the quality of hinges， screens and cellphone body material， the foldable phones have become a choice for more and more users.

Being lighter and thinner， better experience， better durability and lower prices are the biggest changes of foldable phones in the past year.

Counterpoint Research predicts that the shipment volume of foldable phones will be close to 16 million units in 2022， with year-on-year growth of nearly 73%. Other analysts said that as major manufacturers strengthen in-depth cooperation with the supply chain， the shipment volume of new forms of foldable phones will keep growing fast.

Seek to attract a new generation of consumers

“What functions do you value most when purchasing a mobile phone？” A survey showed that 72% of respondents chose powerful imaging capabilities. In the context of the gradual maturity of various video applications， the demand of mobile phone users for daily life records， online live broadcasting and video creation has increased significantly.

Based on user needs， major cellphone brands have been improving their imaging capabilities and reached the top level of the industry. Vivo has joined hands with Zeiss， Xiaomi has worked with Leica， and Yijia has connected with Hasselblad. The technology accumulation of traditional image giants produced shinning results in the smartphone sector. The imaging industry has empowered big cellphone brands， and gave their products more professional imaging capabilities. Also， it has added more cultural connotations to the development of the cellphone brands.

At the same time， the major cellphone manufacturers have been making breakthroughs in the field of imaging. With the support of self-developed chips， AI algorithms and imaging systems， many mobile phones have featured customized and personalized imaging capabilities. Selfies have become the major demands for many young customers.

Maturing 5G technology has enabled the smartphone to become the nexus of internet of things. AR， VR and the metaverse， these concepts seem far away， but they have crept into all aspects of our lives.

As the younger generation has gradually become the main force of the consumer market， the “new species” of intelligent terminals has become a major breakthrough in addition to smart phones. Over the past year， major cellphone manufacturers have invested heavily in R&D of smart vehicle and smart homes， bringing continuous impetus to high-end markets.

The cellphone manufacturers have shared the goal of focusing on technological innovation and brand building and strive to explore the high-end market. At the Xiaomi13 series launch event， Xiaomi Group Founder， Chairman and CEO Lei Jun talked about the “high-end” goal again. Lei Jun said， “looking back on the past three years， the highend strategy has profoundly affected and changed Xiaomi. Xiaomi has realized that the high-end market requires no defaults or weakness， and user experience always comes first. To achieve such goal， it is imperative to make perfect synergy between software and hardware.”

At the same time， OPPO has developed three core capabilities， including self-developed chip Mariana， AndesBrain， and crossplatform system Pantanal. Liu Zuohu， Vice President of OPPO and Founder of Oneplus Mobile， also publicly said that OPPO will invest RMB 10 billion into Oneplus in the next three years for R&D of new products and technology.

Vivo has developed its own chips and made innovation of origin and has laid a solid foundation for building high-end products. With multiple measures already under implementation， the cellphone industry is expecting breakthroughs in the coming 2023.