The overall phone numbers are in for 2022, and the market looks pretty bleak. In fact, research firm IDC (opens in new tab) says worldwide smartphone shipments declined 18.3% year over year in the holiday quarter, marking the largest-ever decline in a single quarter.
It gets worse. The overall decline for the year is 11.3% and the shipment total is the lowest in 10 years. IDC blames "dampened consumer demand, inflation and economic uncertainties."
There is a silver lining in these dire numbers, though. Samsung increased its market share year over year from 20% to 21.6%, finishing No. 1 ahead of Apple. Although Apple also increased its share from 17.3% to 18.8%.
As we head into the Samsung Unpacked event February 1, I asked Nabila Popal, IDC research director, about the Samsung vs Apple rivalry and if Samsung can truly make a splash with its new Galaxy S23 series launch.
Premium is actually growing
The first bit of good news is that Samsung needn't necessarily worry about whether consumers will warm to the high-priced Samsung Galaxy S23 Ultra. It's tipped to cost $1,200 like the S22 Ultra, though we've seen some rumors it could go as high as $1,250.
"The high range has been quite resilient to this tough economic climate, said Popal via email. "If you go back since before the pandemic, $800 plus devices have grown 7 points in share over the last three years (since 2019)."
This is thanks to strong promotions and aggressive trade-in offers, as well as the growth of interest-free financing options from carriers and retailers. In a down market, a premium phone really isn't that premium.
Is 200MP overkill for Galaxy S23 Ultra?
Part of the reason why Samsung is in a slightly better position than some other vendors is simply because competition has dwindled over the past several years among Android phone makers. And it's about to make a big statement in the best camera phone wars with the Galaxy S23 Ultra, which is expected to feature a 200-megapixel main sensor. We've already seen a number of Galaxy S23 Ultra camera samples, and they look pretty impressive.
But Samsung had the megapixel lead in 2022 with its 108MP main sensor on the S22 Ultra, and based on our Galaxy S22 Ultra vs Pixel 7 Pro and Galaxy S22 Ultra vs iPhone 14 Pro Max face-offs, Samsung has been in third place against Apple and Google in terms of overall image quality. So Samsung is going to have to do much more than just deliver more megapixels.
"While cameras are an important feature to consumers, I think it’s gone into overkill today," said IDC's Popal. "Honestly speaking, nowadays parading megapixels won’t do much to influence the consumer buying decision, whether they are choosing between brands or operating systems."
The real reason Samsung can steal share from Apple
Lost in all the doom and gloom around phone sales is the fact that foldable phones now account for 5% of all smartphone sales. And in the U.S. Samsung has 100% of that market with handsets like the Galaxy Z Fold 4 and more affordable Galaxy Z Flip 4. So it's no surprise that the company tops our list of best foldable phones.
Other companies are rolling out foldables, too, including Oppo, Honor and Xiaomi, but for now Apple seems content to stay on the sidelines. Despite rumors of a foldable iPhone Flip, reportedly nothing is on tap for 2023. In fact, Apple analyst Ming-Chi Kuo believes Apple won't launch a foldable until 2025 (opens in new tab). If anything, it seems as if a foldable iPad might come first.
This leaves the door open for Samsung to create more distance between it and Apple.
"I think Samsung is in a better position than ever to steal some share from Apple as they have something that Apple doesn’t yet: foldables," said Popal. "Foldables have gained a lot of traction especially in the last year, and are no longer a just a marketing tool or a short term fad or trend, but a very viable and growing segment of the market that is gaining more and more momentum and consumer interest."
Popal attributes Samsung's market share gain in 2022 to both the growth of its foldables devices as well as the success of the S22 lineup.
The Samsung Galaxy S23 launch is clearly a big deal, and the Ultra in particular could sway some shoppers away from Apple if the cameras live up to the hype. But Samsung's biggest opportunity is in foldables, as it's simply a category Apple does not play in yet.
And with the Galaxy Z Fold 5 and Galaxy Z Flip 5 both on the horizon, Samsung could gain some serious momentum this year against Apple.