NEEDHAM, MA – Worldwide smartphone shipments declined 14.6% year over year to 268.6 million units in the first quarter of 2023, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker.

The decline is steeper than the 12.7% decrease that IDC previously forecasted, and marks the seventh consecutive quarter of decline as the market continues to struggle with lukewarm demand, inflation, and macro uncertainties. Inventory has remained elevated across regions, but is in significantly better shape compared to six months ago thanks to reduced shipments and heavy promotional activities.

"The industry is going through a period of inventory clearing and adjustment. Market players remain cautious deploying a conservative approach rather than dumping more stock into channel to chase temporary gains in share. I think is the smart thing to do if we want to avoid an unhealthy situation like 2022," said Nabila Popal, research director with IDC's Worldwide Tracker team. "While we are optimistic about recovery by the end of the year, we still have a tough three to six months ahead. Everyone is anxious about exactly when the tide will turn and wants to be first to ride the wave of recovery. However, it’s a tricky situation. Anyone who jumps in too soon will drown in excess inventory. Now more than ever, it’s important to keep a close pulse of market. Barring unforeseen elements, IDC expects the market to cross into positive territory in the third quarter and see healthy double-digit growth by the holiday quarter."

Almost all the regions suffered double digit decline in the first quarter. China witnessed close to a 12% drop, which was slightly more than expected despite the recent reopening of the market. Consumers are prioritizing travel and entertainment over smartphone purchases and uncertainty still lingers, which is dampening consumer sentiment. Developed markets like the USA and Western Europe fared better than others with declines of 11.5% and 9.4% respectively. Emerging markets like APeJC, CEE and MEA saw larger 17-20% declines.

“On a positive note, based on recent discussions we’ve had with OEMs and supply chain it appears the smartphone industry is collectively gaining confidence that we’ll see return to growth late this year, and into 2024,” said Ryan Reith, Group VP with IDC's Worldwide Tracker team. “The largest supply side pullback in recent months was primarily those brands that serve the mid to low end of the market. This is usually where competition is high, and margins are low. Typically, these players are more hesitant to ramp back up again, and while this may still be the case, we are starting to see signs that optimism is growing amongst this crowd.”