Smartphone sales fell worldwide last year as consumers grew more cautious in their spending.
That’s according to a recent report by market research firm IDC, which found that worldwide shipments of smartphones dropped 18.3% year over year during the fourth quarter of 2022, the largest ever drop in a single quarter.
“We have never seen shipments in the holiday quarter come in lower than the previous quarter,” said Nabila Popal, research director with IDC’s Worldwide Tracker team. “However, weakened demand and high inventory caused vendors to cut back drastically on shipments.”
Popal added that heavy sales and promotions around the holiday helped exhaust existing inventories rather than fuel new shipments, with vendors growing more cautious. The report notes that Apple, which had until now seemed “immune” to such pressures, had to deal with supply chain issues due to China’s COVID lockdowns.
Meanwhile, Reuters reported Sunday (Jan. 29) that smartphone sales in China fell to their lowest point in a decade last year. That report — also using IDC data — said sales of the devices dropped 13% between 2021 and 2022.
“What this holiday quarter tells us is that rising inflation and growing macro concerns continue to stunt consumer spending even more than expected and push out any possible recovery to the very end of 2023,” Popal said.
Recent reporting by PYMNTS has found a number of examples of this caution. For example, the latest earnings reports from Visa, Mastercard and American Express show that consumer spending has been high, though data from the Commerce Department finds that American households curbed their spending late in the year.
Earlier this month, the National Retail Federation released figures from the holiday season that showed a 5.7% decline in electronics sales between November and Christmas.
That’s in keeping with a December holiday shopping report by Mastercard that showed sales of crucial Christmastime standbys like jewelry and electronics declining by more than 5%.
Both those reports line up with PYMNTS research showing consumers scaling back on spending for nonessential goods such as smartphones or other electronics in favor of core categories like food and fuel.
And even when it comes to essential items, consumers are trying to save money. PYMNTS’ study, “Consumer Inflation Sentiment: Perception Is Reality,” showed that 35% of shoppers had switched to buying lower-quality items at the grocery store as a way to combat rising prices.