US smartphone shipments plunged in the first quarter of 2023 as consumer demand declined and Original Equipment Manufacturers (OEMs) corrected high channel inventory amid increasing macroeconomic pressures, according to market research firm Counterpoint.
The US market saw a drop in shipments across all major OEMs, registering a weaker first quarter than the one witnessed in 2022.
Apple cemented its position as the number one smartphone US with its market share increasing despite a YoY drop in its shipments.
Some key takeaways here:
– Shipments declined 17% YoY in Q1 2023 due to inventory correction and weak consumer… pic.twitter.com/NuTNYc8XYx
— Counterpoint (@CounterPointTR) May 9, 2023
US Smartphone Market Down
US smartphone shipments from electronic firms fell 17% year-on-year in the January to March quarter of 2023, Counterpoints said in a report published May 9. This drop marks the second largest-ever decline in a single quarter in the recent past.
The decline in smartphone shipments was 10% in Q4 2022, 4% in Q3, 3%, and 13% in Q2 and Q1 respectively. The largest drop in recent years was witnessed in Q2 2021 when the US smartphone shipments fell 21%.
Matthew Orf, a research analyst at Counterpoint commented on the situation saying that the US smartphone market started feeling the effects of inflation during the second half of 2022, “especially the low end where consumers have less disposable income and are more sensitive to changes in prices.”
Persistent inflation and an uncertain economic outlook are causing consumers to hold off on new device purchases, resulting in lower upgrade rates and fewer device sales, especially in the prepaid segment.
It is worth noting that the impact of inflation and other macroeconomic factors on the smartphone market have been uneven.
Despite the YoY declines seen in prepaid brands, there were some positives, as noted by Counterpoint’s Senior analyst Maurice Klaehne.
According to Klaehne, “Samsung’s Galaxy S23 shipments were up double digits YoY while the Galaxy A14 5G performed exceptionally well in prepaid.”
The analysts also observed the seemingly widening “gap between low-end and premium devices” which appears to be “creating a vacuum in the mid-range device category.”
Increasing US iPhone Market Share
Apple maintained its position as the number one smartphone in the US. Though US iPhone shipments fell, they did so at a slower rate than the broader smartphone market, giving Apple the opportunity to raise its market share from 49% in Q1 2022 to 53% in the same quarter this year.
One of the reasons given for this phenomenon is “Android-to-iOS migration driven by young and first-time smartphone users.” This continues to be a challenge for Android OEMs.
Despite this migration, Samsung remains the second-largest smartphone player, with its market share remaining the same in Q1 2023.
The South Korea-based smartphone maker saw its shipments to the US remain at 27% year-on-year.
Note that this could have been due to Samsung launching its brand new flagship smartphone for the Galaxy S23+ series in February.
Associate Research Director Hanish Bhatia noted:
Some niche categories may continue to perform well despite overall weakness. For instance, there is a lot of excitement around foldables this year as more OEMs jump onto the bandwagon, which may stir demand for premium devices.“
Counterpoint researchers say that the first quarter of 2023 was marked by drab consumer demand and low upgrades.
“We expect the incumbent postpaid players to increase promotional activity during the second half of the year to combat cable MVNOs, which saw higher net additions than the Big 3 during the quarter, a first for the US market,” said Jeff Fieldhack, research director at the firm.
- Study Shows Small Developer Revenue From Apple App Store Rose 71% in Last 2 Years
- Get Ready for a Slew of AI Generated Android Apps Thanks to Google
- Elon Musk Announces New CEO for Twitter, Stepping Down to Executive Chairman & CTO
What's the Best Crypto to Buy Now?
- B2C Listed the Top Rated Cryptocurrencies for 2023
- Get Early Access to Presales & Private Sales
- KYC Verified & Audited, Public Teams
- Most Voted for Tokens on CoinSniper
- Upcoming Listings on Exchanges, NFT Drops