(AsianFin)—After a prolonged slump, the global smartphone market has finally found its footing, with the latest data from market research firms indicating continued growth in the second half of 2023.
According to IDC's latest report, global smartphone shipments grew 7.8% in the first quarter to a total of 289.4 million units. This marks the third consecutive quarter of growth and suggests a smooth recovery.
Meanwhile, Canalys reports an even more robust growth rate of 11%, underscoring the market's resilience. Samsung has reclaimed its position at the top, with Apple trailing closely behind. Chinese brands Xiaomi and Transsion have emerged as formidable contenders, challenging Apple's long-term dominance.
A stabilizing economy, coupled with the launch of new products and intensified promotional activities, has propelled the market forward, presenting lucrative opportunities for smartphone manufacturers, said Canalys analyst Zhou Lexuan.
While mature markets like China remain significant, emerging markets are increasingly becoming battlegrounds for expansion, offering untapped growth potential. Moreover, while mid-range devices continue to drive sales volume, the high-end segment remains pivotal for manufacturers due to its larger profit margins. Additionally, the integration of AI technology is becoming increasingly crucial, with brands that embrace AI poised for sustained success.
In the fourth quarter of 2023, Apple momentarily claimed the global top spot with its iPhone 15 series, surpassing Samsung. However, Samsung dethroned Apple in the following quarter, leveraging the expansion of its entry-level offerings and a robust AI-focused strategy. Samsung's commitment to AI, as evidenced by its Galaxy S24 series, has resonated well with consumers, driving shipments and solidifying its market position.
In contrast, Apple faced challenges in the first quarter, experiencing a significant decline in market share. Fierce competition from resurgent players like Huawei, coupled with competitive pricing from Chinese rivals, has eroded Apple's supremacy. Despite price reductions and promotional efforts, Apple's sales failed to gain traction, reflecting changing consumer preferences and intensifying market dynamics.
Meanwhile, Chinese brands Xiaomi and Transsion experienced substantial growth, with Xiaomi occupying the third place in the market share. The success of Xiaomi's Mi 14 series and the popularity of its Redmi lineup have narrowed the gap between Xiaomi and Apple. Transsion, known for its presence in emerging markets, solidified its position in the top five by leveraging its competitive advantages in regions like Africa.
According to IDC, Transsion once ranked first in smartphone shipments in emerging markets such as Africa, Pakistan, Bangladesh, and the Philippines. Transsion's performance is sufficient to illustrate that emerging regions such as Africa, Southeast Asia, and Latin America are the new battlegrounds for smartphone manufacturers.
Emerging markets, including Africa, Southeast Asia, and Latin America, present significant growth opportunities, driving demand for cost-effective smartphones. Chinese manufacturers, including OPPO, vivo, Xiaomi, and Transsion, are intensifying their investments in these regions, which has further fueled the already cut-throat competition.
The smartphone industry is still in a period of incremental growth in emerging markets, IDC China senior analyst Guo Tianxiang noted.
However, due to the underdeveloped economy, limited consumer budgets, and the need for improvement in telecommunications and internet infrastructure, most countries are still in the stage of transitioning to 4G, so the demand in these countries is more focused on low-end products, he added.
In the high-end segment, Huawei's resurgence and Xiaomi's Mi 14 series have injected new dynamics into the market. Foldable smartphones and AI integration are emerging as key differentiators, reshaping consumer preferences and brand strategies.
Apple, faced with mounting pressure, is expected to unveil its AI strategy in 2024, signaling a renewed focus on innovation and ecosystem development.
Counterpoint estimates that the high-end market will grow by 17% year-on-year in 2024, with Apple and Huawei likely leading the growth in the high-end market. The evolution of foldable screens is a stimulating factor, and with the addition of AI, more highlights are expected in the high-end market this year.
Manufacturers are seizing new opportunities by promoting high-quality products, such as advanced AI features and services on flagship products, and adopting ecosystem-based product strategies, said Zhou.