After experiencing a downturn for two consecutive years, the global smartphone market shows early signs of recovery in 2024. This resurgence is attributed to various factors, including the growth of emerging market economies, a rebound in consumer spending, an increase in average selling prices, and the rapid integration of generative artificial intelligence in devices.
Market forecast in a gradual uplift
Research firm Canalys predicts a modest year-on-year growth of 4% 2024 for global smartphone shipments, following a 12% decline in 2022 and a 5% drop in 2023. This positive trend signals a stabilization in the industry, particularly in emerging regions like the Middle East, Africa, and Latin America, which are expected to grow 9%, 3%, and 2%, respectively, in 2023.
Counterpoint Research supports these findings, projecting a 3% increase in global smartphone shipments in 2024. This growth is driven by emerging markets’ recovery, improved consumer confidence, and favorable macroeconomic conditions.
Factors influencing the market
Several elements are contributing to the smartphone market’s revival. Analyst Anshul Gupta from Gartner notes that high prices, particularly for food and energy, have impacted consumer spending, leading to a slowdown in smartphone sales. However, as these effects become less pronounced, the market is beginning to recover.
Ramazan Yavuz from International Data Corporation highlights the increased lifespan of smartphones as a factor impacting consumer demand. This trend has put pressure on the market, grappling with low profitability and negative economic outlooks.
Industry dynamics and consumer preferences
Regarding market leadership, Samsung Electronics continues to dominate the global smartphone market with a 20% share, followed by Apple with 16%, and Chinese brands Oppo and Xiaomi hold 14% each. Introducing foldable devices and premium models is expected to impact average selling prices positively.
There’s a notable shift towards high-quality, durable phones on the consumer front. Research by GfK shows a decline in demand for mid and low-end phones (less than $600) in 2023, while the demand for premium models (over $600) rose significantly. This trend reflects consumers’ preference for devices that align with their fast-paced lifestyles and offer a simplified user experience.
Generative AI in a game changer?
Generative AI smartphones are expected to double their market share in 2024, with Samsung poised to capture half of this segment. These AI-powered phones will likely be first launched in high-end and premium devices, initially addressing a narrower portion of the consumer base. By 2027, the industry’s share of generative AI smartphones is projected to reach 40%, surpassing 522 million units in shipments.
Regional outlook
In the Middle East and Africa, growth is expected to be modest. In the UAE, for instance, smartphone shipments are predicted to rise by 9%. The Android market is showing a positive outlook, focusing on market penetration with more affordable brands. Conversely, Apple is anticipated to see a slight drop in 2024, stemming from a healthy performance in 2023.
Overall, the smartphone industry is poised for a significant recovery by late 2023, continuing into 2024. This recovery is not only a reflection of a macroeconomic shift but also a result of strategic adjustments by manufacturers and a shift in consumer preferences towards more advanced and durable devices. As the industry navigates through the changing landscape, striking the right balance between innovation, competitive positioning, and market-specific challenges will be crucial for sustained growth.
Source: https://www.cryptopolitan.com/2024-smartphone-market-signs-of-recovery-and-emerging-trends/