Smartphone Market Decline: Samsung and Apple Gain Share
Global smartphone shipments fell while two giants expanded their market dominance.
1Market-Wide Decline
According to Omdia's report, global smartphone shipments dropped 4% in Q2 2023 year-over-year. The primary reasons behind this decline are the ongoing memory crisis and rising component costs. Manufacturers have been forced to pass these increased costs onto consumers.
2Samsung and Apple's Rise
While the market contracted, Samsung and Apple managed to increase their market shares. Samsung grew from 20% to 22%, while Apple expanded from 16% to 20%. This growth is attributed to Apple avoiding price hikes and Samsung strengthening in the budget segment.
3Chinese Rivals Lose Ground
Chinese brands like Xiaomi, Oppo and vivo lost market share. Xiaomi dropped from 15% to 11%, Oppo from 12% to 10%, and vivo from 9% to 8%. Their product line reductions and price increases weakened their competitiveness in the budget segment.
4Impact of Memory Costs
Memory and storage components now account for over 60% of budget device material costs. Omdia analyst Runar Bjorhovde notes that the tightest supply constraints and thinnest margins are in the under-$400 segment, significantly impacting consumer purchasing behavior.
5Future Projections
Omdia predicts the sharpest sales declines will occur in Q3 and Q4. While memory price drops are expected only in the second half of next year, they're unlikely to return to pre-2025 levels. The market challenges are expected to persist.
6Changing Consumer Behavior
As manufacturers focus more on premium segments, budget-conscious consumers face fewer options. This is causing many mass-market buyers to delay purchases, lower expectations, use financing options, or turn to refurbished devices instead.