Global drop to 96 million units in smartphone sales in May 2022
Global smartphone sales saw a dip below the 100-million mark in May 2022, dropping 4% month-on-month (MoM) and 10% year-on-year (YoY). It’s the 2nd consecutive fall in MoM sales and 11th - in YoY sales. This indicator has yet to get back to the pre-pandemic level, although there was a V-shaped recovery after the COVID-19 pandemic.
In addition to the stabilizing situation with component production and logistics, there’s also a demand shortage due to rising inflation, China's economic slump, and the Russia-Ukraine war. As a result, inventory is building up, leading to declining shipments and order cuts. Sales may be most heavily impacted in Q2 2022, and some improvements may come in the second half of 2022.
China’s lockdown and continued economic slowdown along with the Russia-Ukraine war are hurting demand in China and damaging global logistics and production chains. The Chinese smartphone market showed a slight recovery trend in the recent months, yet it’s still 17% below the numbers from a year ago.
Experts expect the situation to improve in the second half of 2022 with the forecasted normalization of the economic situation in China and supply and demand levels, as well as the general improvement of the global economy. There are large-scale promotions in the period starting June, and the holiday season in the end of the year. The new phone launches (iPhone 14 series and Samsung Galaxy Z Fold 4) will hopefully boost demand.
Currently demand is driven mostly by replacement, making it a discretionary purchase. With the onset of rising inflation, people are delaying non-essential purchases, and smartphones are among them. The strengthening of the US dollar is also damaging emerging economies, and many consumers are likely to wait for seasonal promotions before making a purchase.