Omdia: Global smartphone shipment decline slows as many manufacturers see a return to growth

LONDON, November 3, 2023 – In the latest Omdia smartphone preliminary shipment report, shipments totaled 301.6 million units in 3Q23 – a 0.7% decrease compared to 3Q22. Compared to the previous quarter, though, it is a 13.4% increase. For the first time this year, half of the top ten major smartphone set OEMs saw growth, including Apple, Xiaomi, Transsion Holdings Group, Honor and Huawei. The other half includes Samsung, vivo and Realme, who all saw large declines.

This marks the ninth consecutive quarter of year-on-year declines in overall smartphone shipments, coming after the period of strong smartphone demand seen over the COVID-19 pandemic between 4Q20 and 3Q21. The market has not been able to keep pace with that expansion as a range of challenges have rocked the industry and global economy, from production problems in China to high inflation shrinking consumer confidence and demand.

Samsung still had the most shipments in 3Q23, reporting 58.8 million shipments – a 10.3% increase from the dip we saw in 2Q23. This is not enough to reach shipment levels seen in 2022, though, with an 8.2% fall compared to 3Q22. As a result of this fall, and the good performance seen by many other brands, Samsung’s market share fell two percentage points from 21% in 3Q22 to 19% in 3Q23.

Apple has quickly recovered from the decline it saw in 2Q23, seeing a 23.6% increase quarter-on-quarter and 2.3% year-on-year with 53.4 million units. Tim Cook said that Apple recorded a September quarter revenue record for iPhone in the earning calls today. As such, Apple’s market share increased to 18% in 3Q23, up from 16% in the previous quarter. 

“In China, Apple's main market, the sales situation for the new iPhone has become difficult due to the launch of Huawei's new 5G flagship smartphones and political issues. Nevertheless, Apple's shipments in the fourth quarter and overall this year are expected to increase compared to last year due to the steady increase in premium demand and meaning hardware upgrades of iPhone 15 standard model,” said Jusy Hong, Senior Research Manager at Omdia.

Xiaomi’s market share is recovering after an extended period of falling shipments. In 3Q23, it saw 41.5 million shipments, a 25.0% increase from the previous quarter and a 2.5% increase from the past year. It has managed to retain and strengthen its position as the third largest OEMs globally, facing off stiff competition from other Chinese OEMs Oppo, vivo, and increasingly, Transsion Holdings. 

Oppo Group, which includes both the Oppo and OnePlus brand, recorded 26.6 million shipments in 3Q23. This is an 8.6% fall from the past year, meaning it is one of smartphone OEMs which has not yet started to recover, such as Xiaomi and Apple, as it is still grappling with the challenging market 2023 has thrown up.

Transsion Holding continued its explosive rise in shipment figures, increasing a further 7.3% from 2Q23, for a total of 26.3 million in 3Q23. This is a staggering 48.6% increase from the past year, when it saw 17.7 million units in 3Q22. This means that Transsion has maintained its lead over vivo as the fifth largest OEM in 3Q23, even getting close to beating Oppo Group to be the fourth largest – just 300k shipments between them. 

Zaker Li, Omdia Principal Analyst for smartphones says, “Transsion Holdings’ rise has come after a long period of stagnation, as it was digesting the inventories from 1Q23, and as consumers had less money to spend. But clearly Transsion is very ambitious going into 2024, rapidly expanding its production plan. This shows that its efforts to expand into more markets could be proving successful.”

Vivo remains pushed down into sixth place by Transsion, having experienced a 10.7% fall in shipments from 25.3 million in 3Q22 to 22.6 million in 3Q23. Despite this it holds a steady market share of 8%, and with its eyes set primarily on the domestic Chinese and APAC market, it has been largely beholden to the market in that region. As the region recovers, vivo is likely to as well.

Honor has continued its sustained growth throughout 2023, bucking the trend as seen by many of its competitors. It recorded 15.8 million unit shipments in 3Q23, 1.6 million or 11.3% more than 3Q22. Despite this growth, it’s very unlikely that Honor will reach the same shipment levels in 2023 as 2022, due to the large dip in shipments it saw in 1Q23. Thus far this year, it has shipped 41 million units, compared to 45 million in the same period between 1Q22 to 3Q22 – a 7.6% fall.

Realme has been unable to recover in shipments from a dip in 1Q23. It shipped 10.6 million units in 3Q23. While this is up 5.0% quarter-on-quarter, it still marks a 22.1% fall from the previous year. This means that of all major smartphone brands, Realme has experienced the largest percentage drop in its shipments throughout 2023 so far. It has shipped 29 million so far this year, compared to 42 million in the same period in 2022 – a 30.5% drop. 

This also means that the gap between Realme and Motorola has widened, from 300k in 2Q23 to 600k in 3Q23. Motorola recorded 11.2 million shipments in 3Q23, up 7.7% on the previous quarter but down a slight 1.8% year-on-year. This means that thus far in 2023, it has shipped 32 million, down 11.8% from the same period in the previous year.

“Throughout 2023, Chinese OEMs have generally seen a worse decline than the market average. This could be attributed to the larger decline in the domestic market than overseas. There are other obstacles also facing Chinese OEMs, the Indian government has put in place stricter requirements for local smartphone assembly, slowing penetration of that market as Apple is making in-roads,” said Aaron West, Senior Analyst at Omdia. 

Following the much-hyped and much-speculated launch of the Huawei P60 Pro, the OEM has seen a boost in its smartphone shipments. In 3Q23, it recorded 10.7 million shipments, up 1.9 million from 3Q22, or a 24.4% increase. This, in fact, edges it slightly ahead of Realme this quarter, making Huawei the 9th largest smartphone OEM this quarter following a long stint in 10th position. Overall, Huawei has performed well against very tough market conditions to claw back market share from its domestic competitors. It’s in a strong position to end the year on a high note, following the successful launch of its new phones.

Hong concludes: “The smartphone industry remains slightly below the shipment total we saw in 3Q22, however there are already signs of a recovering market. Half of all major brands saw increased shipments compared to the past year, with Transsion, Honor and Huawei particularly exceeding. It’s therefore clear that problems that have been facing the smartphone industry in 2023 are coming to an end; inflation is slowing globally, and with which consumers’ confidence is also growing. The whole market is down 7.5% so far in 2023 compared to the first three quarters of 2022, meaning the final 2023 total is likely to be below that of 2022. But there are signals that a slow recovery is already underway.”