Smartphone market sees worst quarterly performance in over a decade, but Google defies...

[midian182]

In brief: There has been a lot of talk about North American industries showing signs of recovery over the last few months, but it seems nobody told the smartphone market. The segment's second quarter has been described as the "worst quarterly performance for over a decade," and the full-year outlook is just as grim. The only company to have a positive quarter was, surprisingly, Google.

The latest Canalys report on the state of the North American smartphone market shows that overall shipments were down 22% in the second quarter. The finger of blame is being pointed at macroeconomic challenges such as rising interest rates and persistent inflation, which have led to a drop in consumer demand.

The second half of the year is predicted to be slightly better, thanks to the launch of new models in Q3 such as the iPhone 15 Pro series – though Apple might want to address those overheating issues ASAP.

Despite people trying to rein in their spending during these economically challenging times, the premium segment - those phones costing more than $1,000 - is expected to remain solid as people turn to early trade-ins and financing options. Apple and Samsung actually boosted their premium segment shipments with 25% and 23% growth, despite overall YoY declines.

"Smartphone vendors are banking on the premium segment to navigate uncertainties," said analyst Lindsey Upton. "The ASP of North American smartphones increased to US$738 in Q2 2023, up from US$663 in Q2 2022."

The same can't be said for the budget sub-$200 section, which is expected to struggle as prepaid demand falters.

Also read: The once revolutionary mobile phone industry is in complete stagnation

Looking at individual brands, Apple remains at the top of the pack with 14.8 million shipments during Q2, down 20% compared to a year earlier. Second place Samsung fell 27% from 9 million to 6.6 million. Motorola was down 25% to 2.3 million. And TCL dropped 30% to 1.3 million. The only company that saw positive growth was fifth-place Google, up 59% from 0.8 million shipments to 1.2 million.

The biggest decline (43%) is in the "Others" section, which covers the previously mentioned sub-$200 devices like pre-paid phones. It was recently reported that many of these smaller companies are shuttering rather than continuing to struggle – nearly 500 brands have left the smartphone market since 2017.

Canalys expects year-on-year shipment growth for 2023 to be down 12%. Looking further ahead, 2024 is predicted to see a slight recovery (3%), while 2025 is up 7%. The analyst does warn, however, that shipments are unlikely to break the 150-million-unit mark before 2027.

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https://www.techspot.com/news/100309-smartphone-market-sees-worst-quarterly-performance-over-decade.html

 

[Jarenien]

No real surprise here. Phone prices are stupid right now. Bring them back down to the $500-$600 they were a couple years ago, and people will buy a new one every year, but when they are $1500 a pop now, people are going to keep them 3-4 years easy. Smartphone companies have no one to blame but themselves for being so stupid.

 

[Uncle Al]

People are tired of paying bloated costs for phone's that are full of bloat-ware. One simply cannot understand why so many flock to buy the newest I-phone when there are few, if any, real upgrades. I bought my Moto phone 5 years ago and it's camera is still better than most, it does everything I want and my only complaint is that in a few years the upgrades may stop but so far Motorola has been good to me with a first class smart phone! Oh yeah, I paid $250 for it.

 

[ScottSoapbox]

People are tired of paying bloated costs for phone's that are full of bloat-ware.

Bloatware???

... oh Android, right.

The walled garden has issues but I haven’t dealt with bloatware ever.

 

[Dimitriid]

Hope nobody confuses my mention of the issue as implied endorsement of it but here it goes: They didn't plan their obsolescence very well.

If you want it on simpler term: Unless you really want a folding device and other smaller novelties, what has really changed for a day-to-day, regular or even power user for the Samsung Galaxy since about the S20 days or so? Apple doesn't has this issue in such a pronounced way but it's still there since well, there's a lot less power users a.k.a. more regular folks using iphones: What has really changed for them since the iphone 10 or 11? Sure they might want a bigger size phone now or might be tickled by the improved camera or ultimately think they don't just need a replacement battery but a new phone but still.

Sorry but most high end phones have been on the business of selling you not the phone, but the phone spec sheet for a while with just not enough in the way of things to do with it to justify updates every 2 or even 3 years. It's kinda why if not specifically told they're getting a lesser product, most people could replace a flagship phone from 3 years ago with your most average mid range device and they wouldn't notice a difference at least at first anyway.

Like do you really need an extra 30 megapixels to take pictures of your mangy dog in your messy house with such poor lighting the extra image quality will only make you sad you haven't taken care of your pet or your house very well? Do you really need to spend what 1500 bucks to play Resident Evil Village on your phone very inconveniently for like 30 to 40 minutes before you need a charger or can you just play it again on your PS5 anyway?

There's just not enough time focusing on improving the software to make sure the extra power on the hardware year over year becomes desirable to consumers most of them won't care about the marketing after a certain price point which well, they've officially found by pushing past 1000 usd entry levels for high end devices.

 

[Sharak14]

I bought my Moto phone 5 years ago and it's camera is still better than most, it does everything I want and my only complaint is that in a few years the upgrades may stop but so far Motorola has been good to me with a first class smart phone! Oh yeah, I paid $250 for it.

Bought my Moto phone in 2020 for the same price and everything since then has had worse specs,display, & battery life for that price tier.

 

[UdyrL]

Phones, computers... you really don't need a new one every year.

 

[Theinsanegamer]

Bought my Moto phone in 2020 for the same price and everything since then has had worse specs,display, & battery life for that price tier.

Fellow moto g power user!

Same boat. Moto g power 2020 was the GOAT, every power since then either cheaps out with mono speakers and 720p displays or low end mediatek chips instead of snapdragons. The upper end moto g stylus is $399, on a permanent sale of $299 but LOADED with crapware.

Samsung has a potential viable option in the A54, but again, $399 and bloatware. Google I've long given up on, HTC and LG are bygones, and sony is insanely pricy.

There's really been 0 reason to upgrade. My moto z play was 4 years old and broke after a fall, otherwise id still use it. This one is going on 4 years, still no reason to replace it, and nothing attractive out there anyway.

 

[p51d007]

Inside the USA, most consumers are "conditioned" into buying a new phone every year. When Sprint, Cingular, AT&T et al were around, most people in the USA could only purchase from a carrier store. You would get a phone "for free" under a contract and next year they would goad you into another new one with more something, just sign up for another contract. After a while, people would be like robots and go and buy a new one each year...because the people in the carrier store would tell them this one has a faster processor, better display, more megapixels, and on and on. In most ignorant consumers minds, MORE is BETTER.
I bet 99% of the consumers that use smart phones, NEVER reach the capacity of what it can do, outside of storing photos/videos/mp3's.

 

[Johnnyblaze1957]

I am thoroughly enjoying my first Google phone the pixel 7 pro, all I need to do this phone is very adequate should do me for 4 or so years no problem.

 

[disadadi]

No real surprise here. Phone prices are stupid right now. Bring them back down to the $500-$600 they were a couple years ago, and people will buy a new one every year, but when they are $1500 a pop now, people are going to keep them 3-4 years easy. Smartphone companies have no one to blame but themselves for being so stupid.

It's not that simple. The phones already cost like $500 ish to manufacture, let alone all the R&D and marketing done.
$600 price tag on a modern smartphone would mean probably negative margin for the manufacturer because the components are so advanced that the pricing on those has also increased significantly. Camera sensors, SoCs, everything costs more than previously, it's not just the end product that's expensive.

 

[disadadi]

Inside the USA, most consumers are "conditioned" into buying a new phone every year. When Sprint, Cingular, AT&T et al were around, most people in the USA could only purchase from a carrier store. You would get a phone "for free" under a contract and next year they would goad you into another new one with more something, just sign up for another contract. After a while, people would be like robots and go and buy a new one each year...because the people in the carrier store would tell them this one has a faster processor, better display, more megapixels, and on and on. In most ignorant consumers minds, MORE is BETTER.
I bet 99% of the consumers that use smart phones, NEVER reach the capacity of what it can do, outside of storing photos/videos/mp3's.

Then again, phones cater to so many different kind of users and use cases that it's unlikely even a power user will ever max out on the phone's potential in all aspects of use or what it offers.