The global economic downturn continues to have a negative impact on consumer behavior, which is also reflected in the smartphone market. According to TrendForce, global smartphone production in the first quarter of 2023 decreased by almost 20% compared to the same period last year to 250 million devices. This is not only the most significant annual drop, but also the worst quarterly result since 2014.Samsung increased production in the first quarter
Contrary to the general negative trend, market leader Samsung increased its production by 5.5% from the previous quarter, aided by the launch of the Galaxy S23. The South Korean giant produced 61.5 million devices in the January-March period, down 16.7% compared to the volume in the same period last year. TrendForce warned that weakening demand for new smartphones in the current quarter will lead to a decrease of close to 10% in Samsung’s production.
Apple was down 27.5% on a quarterly basis, and annual production of its devices fell almost 12% to 53.3 million units. The new iPhone 14 accounted for about 78% of that volume. TrendForce expects Apple’s smartphone production to fall another 20% in the second quarter.
In light of adverse market conditions, the Chinese company Oppo (which produces the Oppo, Realme and OnePlus brands) reduced its device production to 26.8 million units in the January-March period. This figure is 17% less than the previous quarter and almost 34% below last year’s level. TrendForce welcomed the company’s move, noting that Oppo could increase its smartphone production by more than 30% in the second quarter thanks to effective inventory management and moderate demand recovery in Southeast Asia and other regions.Used and refurbished phone sales increased
Another Chinese vendor, Xiaomi (Xiaomi, Redmi, Poco brands), launched 26.5 million devices in the January-March period, reducing its smartphone production by 27.4% quarter-on-quarter and 40.4% year-on-year. TrendForce believes that the main reasons forcing the company to cut production are low consumer demand worldwide and Xiaomi’s excess supply. In the second quarter, the production of devices with this brand is expected to increase by 20% compared to the January-March period.
Completing the top 5 vendors, China’s Vivo (Vivo, iQoo) shipped 20 million smartphones in the first quarter, down 14.2% and 12.3% quarter-on-quarter and year-over-year, respectively. China remains the company’s main market, but demand in the country is still sluggish, so analysts expect a slight increase in Vivo’s production in the range of only 10% in April-June.
TrendForce stated that the ongoing economic downturn has boosted sales of used and refurbished smartphones. According to analysts, this may limit growth in new device production. Production in the current quarter is expected to increase by 5% compared to the previous quarter and reach 260 million units.
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