The state of the smartphone market: here's what the last quarter of 2022 tells us

The last quarter of 2022, which mind you includes the holiday season, saw the lowest overall shipments of smartphones since 2013. The numbers amounted to an 18.3% year-over-year drop for the period between October and December, which is "the largest-ever decline in a single quarter" as stated by reputable analyst firm IDC (via CNBC).

Why? Well, to put it into one word — lack. Lack of economic stability and lack of overall customer demand for mobile phones. It is no secret that we have reached a new ceiling when it comes to mobile phones, with new models often having incremental improvements over their predecessors from the previous year.

That doesn't mean that the phones we have today have reached their last evolution stage and utmost potential. No, it merely means that people feel less urge to buy a replacement for their phone, as they typically don't have a significant enough reason to do so. On that note, IDC also shares that, on average, a person nowadays tends to spend around 40 months before upgrading to a new phone. To help you with the math here, that's about 3 years and 4 months.

What makes last quarter's drop in phone shipments more surprising, however, is that the numbers were even lower than those from Q3. Nabila Popal, the research director at IDC, says that they "have never seen shipments in the holiday quarter come in lower than the previous quarter.” According to Popal, this can be attributed to weakened demand and high inventory, in consequence of which vendors cut back drastically on shipments.

Given that the issues here generally affect everyone, even though they saw around a 15% decline in shipments, the two largest phone manufacturers — Apple and Samsung — have held on to their first and second place in the market. That percentage is still quite high, though, so we can expect both companies (as well as others) to double down on services rather than hardware, even more than they have so far.