Counterpoint: US Smartphone Shipments Experience a 24% Drop

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The US smartphone market faced a massive 24% year-over-year decline in Q2 this year, according to market research conducted by Counterpoint. This downturn doesn’t come as a surprise, as it marks the third consecutive quarter with declining sales.

The US Smartphone Market in Drop: What’s Driving the Decline?

Major smartphone manufacturers like Samsung, Motorola, and TCL-Alcatel bore the brunt of the slump, experiencing significant declines in shipments. Samsung’s shipments plummeted by 37%, Motorola’s by 17%, and TCL-Alcatel’s by a staggering 69%. In contrast, Apple managed to weather the storm relatively well, with shipments decreasing by only 6%. Analysts view this as a positive sign for the highly anticipated iPhone 15 series.

Out of all the smartphone brands, Google stood out as the only one to increase its shipments, witnessing a remarkable 48% rise, albeit from a lower starting point.

The current market landscape reveals Apple’s dominant position, commanding a substantial 55% market share. Samsung follows in second place with a 23% share, and Motorola secures the third spot with a 9% market share during Q2 2023.

Interestingly, amidst the overall market struggles, foldable smartphones are thriving due to the emergence of new competition beyond Samsung. Motorola introduced its Razr 40 and 40 Ultra, and Google made its foray into the foldable market with the first Pixel Fold. With the upcoming release of Samsung’s Galaxy Z Fold5 and Z Flip5, analysts predict the foldable market will reach unprecedented heights in the next quarter.

The downturn in the smartphone market is attributed to the recent economic turmoil, causing people to be more hesitant about upgrading their devices. Analysts anticipate low upgrade rates to persist throughout Q3 as a result.

Overall, Q2 2023 brought significant challenges for the US smartphone market, with several major manufacturers experiencing a decline in shipments. However, the foldable smartphone segment shows promise and is expected to drive growth in the coming months. As the industry grapples with economic uncertainties, all eyes are now on how the market will evolve in the subsequent quarters.

Experts’ analysis

Despite the overall drop in shipments, certain segments of the US smartphone market saw important signs of life in the quarter. Senior Research Analyst Maurice Klaehne said, “In spite of declining smartphone shipments, the foldable market reached important milestones in the quarter. Motorola launched the Razr+, its first foldable device in the US since 2021, and Google launched its first-ever foldable, the Pixel Fold, providing alternatives to the Samsung Galaxy foldables. With new Galaxy Z Flip and Z Fold devices coming from Samsung in Q3 2023, foldable shipments could reach their highest level ever in the US in Q3 2023.”

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Associate Research Director Hanish Bhatia noted, “Despite fewer shipments from Apple compared to the same quarter last year, the brand’s share of shipments was still up 10% YoY. Apple’s resilience was driven by strong promotions across postpaid and prepaid. Verizon, AT&T and T-Mobile continued to offer $800+ promo credits for the iPhone 14 while old-generation iPhones were also steeply discounted across prepaid. We are seeing no weakness in the overall promotional activity. In fact, we observed new highs for trade-in credit with Verizon offering up to $1,100 for the Pixel Fold. Google’s Pixel also grew from a small base and launched its old-generation Pixel 6a in the prepaid channel for the first time to compete with the iPhone 11. Both devices were heavily subsidized in prepaid channels.”

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Director of North America Research Jeff Fieldhack said, “AT&T and T-Mobile reported positive net adds, but Verizon reported negative net adds within its consumer segment for the second consecutive quarter. The net-add activity remains comparable to last year, but the upgrade rates have been lower, causing overall weakness in demand. Near-record low churn has also had a dampening effect on new device sales. Weakness is likely to continue through the start of Q3 2023. But stronger iPhone 15 demand could offset weakness across Android.”

The Future of the US Smartphone Market

It is difficult to say what the future holds for the US smartphone market. However, there are a number of factors that could contribute to a recovery in the market. These include an improvement in the global economy, the introduction of more affordable foldable devices. And the launch of new innovative features that drive demand for new smartphones.

In the meantime, the US smartphone market is facing some challenges. However, there are still some bright spots, such as the foldable market. It will be interesting to see how the market evolves in the coming quarters.

Here are some additional thoughts on the decline of the US smartphone market:

  • The economic turmoil is likely to continue to weigh on the market in the near term.
  • The foldable market is a bright spot, but it is still a small segment of the overall market.
  • The iPhone 15 could be a major release. But it is not clear if it will be enough to offset the weakness in the Android market.
  • The overall outlook for the US smartphone market is uncertain.

However, there are also some reasons to be optimistic about the future of the US smartphone market.

  • The US economy is still the largest in the world. And there is a large and growing population of smartphone users.
  • The smartphone industry is constantly innovating, and there are always new features and devices that could drive demand.
  • The US smartphone market is still relatively competitive, which could lead to lower prices and better products for consumers.

Overall, the future of the US smartphone market is uncertain. However, there are a number of factors that could contribute to a recovery in the market. It will be interesting to see how the market evolves in the coming years.

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