Smartphone sales in China fell to their lowest in a decade in 2022, according to data from the International Data Corporation (IDC).
Total shipments of smartphones within China reached 286 million in 2022, down from 329 million the previous year, marking the first time since 2013 the country’s smartphone shipments have dipped below 300 million. This matches the global trend – the fourth quarter of 2022 saw the largest ever drop in global phone sales in a single quarter at 18.3%, with the overall year-on year-decline being 11%.
The IDC cited protests that erupted at the world’s largest iPhone factory in Zhengzhou, Henan province as a major reason behind reduced phone shipments worldwide. After a sudden lockdown caused workers to flee its Zhengzhou factory in October 2022, Foxconn (Apple’s supplier) hired a fresh set of workers under the incentive of higher wages. The workers did not receive any bonuses as agreed and in fact many were quarantined without food in factory accommodation. Foxconn attempted to outsource the production of iPhones to factories elsewhere in China, but the protests still led to major supply chain disruptions.
IDC previously predicted a 2.8% uptick in smartphone shipments over the course of 2023, but the record-breaking data from 2022’s fourth quarter throws that into question as a longer post-COVID recovery is now expected. Anthony Scarsella, Research Director at IDC’s Mobile Phone research team, thinks there is still cause for optimism among consumers: “promotions will continue until 2023 as the market considers new ways to drive upgrades and sell more devices, especially high-end models”.
Ten years of tightening control under Xi Jinping has led to worldwide concerns over heavy economic reliance on China. India and Vietnam are increasingly seen as preferable options for outsourcing production. The disruptions arising from protests and other socio-political factors in China in recent months underscore outsiders’ concerns and are likely to accelerate China’s turn away from an export-oriented economy.