• Italy’s smartphone sales fell 28% YoY in H1 2023 due to challenging macroeconomic conditions.
• The OPPO group’s share in Italy’s smartphone market in H1 2023 was more than double its share in other major Western European countries.
• However, the OPPO group’s market share in Italy declined compared to the previous year.

In the first half of 2023, Italy’s smartphone sales plummeted 28% YoY to below 5 million units. This was well above the average market contraction of 19% observed across Europe and marked the worst half-year performance of the Italian market since 2019.

The decline can be attributed to the high inflation prevailing in Italy since last year, which has significantly impacted consumer sentiment. Italy’s share in Western Europe’s smartphone market has also decreased. Other major countries in the region, like the UK, France and Germany, have seen relatively stable or increasing shares.

Source: Counterpoint Monthly Handset Tracker

Another difference between the smartphone markets of Italy and other major Western European countries is the significantly higher share held by the OPPO group (OPPO, OnePlus and realme) in Italy’s market. In the first half of 2023, the OPPO group’s share in the Italian smartphone market stood at around 11%, more than double its market share in the UK, France and Germany. This suggests that Italy is one of the markets in Western Europe where the OPPO group intends to focus its efforts, especially after its withdrawal from the German and French markets following a patent dispute with Nokia.

However, the OPPO group’s market share in Italy has declined compared to the previous year. In the first half of 2022, it held a market share of 17%, making it the top Chinese brand in the market. But in the first half of 2023, Xiaomi regained the top spot among Chinese brands after experiencing a 2% increase compared to 2022 and capturing a 16% market share. This shift can be attributed to the fact that in the Italian smartphone market, where the sub-$200 budget segment accounts for nearly half of the market, the OPPO group’s sales in this price range decreased by 40%, and it managed to feature only two models in the top-20 bestseller list. In contrast, Xiaomi achieved the opposite by aggressively promoting both online and offline channels, with a particular focus on its Redmi Note series. This resulted in seven of its models making it to the bestseller list within that price range.

Source: Counterpoint Monthly Handset Tracker

If this trend continues, the OPPO group’s position in Italy will become increasingly uncertain. Defending or growing market share in Italy is essential to offset the losses due to downsizing or withdrawal from other major Western European markets. Therefore, a strategy targeting both the sub-$200 budget segment and the gradually growing premium segment (>$600) simultaneously may be required.

The Italian National Institute of Statistics’ (ISTAT’s) recent prediction of a further slowdown in inflation over the coming months, along with an upward revision of the annual economic growth rate from the initial estimates, raises hopes of the Italian smartphone market avoiding further significant declines. Within this context, the sustainability of OPPO group’s position in Italy’s smartphone market is of particular interest.