Market watchers may disagree on how much smartphone shipments rose in the third calendar quarter of this year, but they agree that the market is emerging from the post-pandemic doldrums.
Global market research firm Canalys reported on Monday that global smartphone shipments increased by 5% in the third quarter compared to the same period in 2023. It said this increase marks the fourth consecutive quarter of growth.
Meanwhile, IDC calculates that growth is expected to be 4% over the same period, marking the fifth consecutive quarter of growth.
Canalys attributes this to the early stages of the replacement cycle in North America, China and Europe, as well as increased demand in emerging markets.
IDC noted that the surge in shipments in the third quarter was driven by strong growth from Chinese vendors such as Vivo, Oppo, Xiaomi, Lenovo, and Huawei.
Apple’s Sterling Quarter
Nabila Popal, research director for worldwide client devices at IDC, noted that Chinese mobile phone manufacturers were not the only ones to record strong growth during this period. “While the growth of Chinese companies in emerging markets has been a continuing theme this year, Apple also saw a 3.5% year-over-year increase in shipments this quarter due to strong demand from previous models and the launch of the new iPhone 16 lineup. ” she said in a statement.
“In Q3 2024, older iPhone models, especially the iPhone 15, performed very well due to extensive promotions and increased marketing efforts centered around Apple Intelligence,” she noted.
“Despite the gradual rollout of Apple Intelligence in markets outside the U.S., as we expect many customers to upgrade from iPhone 13, iPhone 12, and earlier models to new AI-enabled smartphones, Apple will continue to grow into the next holiday season, providing long-term purchasing potential into the future,” Popal predicted.
According to Canalys, Apple’s growth in the third quarter helped it nearly dethrone Samsung from the top spot in the market.
“Apple achieved its best third-quarter sales ever and has never been closer to leading the global smartphone market in the third quarter,” Canalys analyst Runar Bjorhovde said in a statement. said.
He noted that “the market’s shift toward premium devices intersected by continuous update cycles for devices purchased during the pandemic has benefited Apple, especially in the company’s home bases such as North America and Europe.” did.
He continued, “Despite its modest initial reception, iPhone 16 is a good bet for Apple to continue its strong finish into 2024, especially as Apple Intelligence expands into new markets and supports additional languages. , is expected to help build momentum in the first half of 2025,” it added.
Samsung keeps Catbird seat
According to IDC, Samsung shipped 57.8 million phones in the third quarter, giving it an 18.3% market share. In comparison, shipments in Q3 2023 were 59.5 million units, with a market share of 19.6%. In comparison, Apple shipped 56 million units during the same period. Sales volume in the third quarter of 2023 was 54.1 million units, with a market share of 17.8%;
“Despite the decline in total shipments, Samsung maintained its market leadership,” Francisco Geronimo, vice president of EMEA client devices at IDC, said in a statement.
“However, the company continues to expand its share in the premium segment as a stronger mix of Galaxy AI-enabled models drove average prices higher in the quarter,” he continued.
“The company started rolling out Galaxy AI features to other Samsung models and launched new foldable Galaxy Z Fold6 and Galaxy Z Flip6 powered by Galaxy AI, which contributed to improved performance in the premium segment,” he said. Explained.
“I think improvements in AI capabilities are making mainstream smartphones look more appealing, and there’s a growing desire for AI everywhere,” said the Austin, Texas-based technology analyst and advisory firm. Anshel Sugg, senior analyst at Moore Insights and Strategy. he told TechNewsWorld.
An industry at risk of survival
Le Xuan Chiew, an analyst at Canalys, pointed out that the gap between the top five vendors is narrowing and the competitive environment is becoming more intense.
“Vendors are entering the holiday shopping season with solid momentum and cautious optimism, holding off on device upgrades in anticipation of sales during major events such as 11.11 and Black Friday,” he said in a statement. “We aim to attract consumers who were previously in the market.”
“However, the importance of effective resource planning cannot be overstated,” he continued. Although market conditions are improving, demand remains fragile as vendors face global challenges in demand generation and increasing regulatory hurdles such as the EU’s Ecodesign Directive. ”
“Effective supply chain management, maintaining healthy inventory levels, and optimizing the allocation of sales and marketing funds have become even more critical to market leadership.”
Bjorkhovde told TechNewsWorld that the smartphone industry is currently facing an existential crisis. “They have to try to find attractive points where they can extract some demand,” he says.
“Right now, it’s all about generative AI,” he continued. “A big reason why AI is such a big topic is because many smartphone vendors are looking to it when finding new monetization opportunities.”
“But people don’t really understand what many of these AI capabilities are,” he argued. “From an analyst’s perspective, there are a lot of really interesting developments that will lead to interesting products and solutions in two, three, maybe even four years. But for consumers right now, AI capabilities are just a flashy thing. It’s just an editing tool. It doesn’t really change what you can do on your smartphone.”
Continued growth expected in 2025
Bjorkhovde explained that the smartphone market has become a tactical game. “In the face of a clear global trend of people spending more time on their phones, the company is looking to attract switchers and find opportunities to upsell users,” he said.
“The goal is to encourage people to upgrade, but the opposite is happening,” he continued. “In the U.S., carrier discounts and subsidies are not as strong anymore. So it’s really about finding some add-on features, new revenue streams, new opportunities, and maybe even leaning more into B2B. That’s really where most smartphone vendors are focused.”
He further added: “This industry has moved from the concept of revolution to evolution. From 2007 to 2015, every release was always very exciting, so I think this industry lives under its own spell. Something unexpected always happened. It’s not so exciting now.”
But the urge to upgrade is stronger at the lower end of the market, he argued. “Two or three years ago, if you bought a $150 cell phone, you probably got a 12-megapixel camera and a battery that lasted half a day, maybe a full day. The battery life is two to three days. So the upgrades that are happening in the budget segment are really quite dramatic.”
Looking ahead to 2025, Sag predicted the market should grow in the low single digits, which is normal for mature markets.
Bjorkhovde also expects continued growth in the market. “I think we’re looking at probably a year and a half. And if Apple Intelligence starts to introduce some new features and becomes really interesting in a year’s time, then that’s going to be the driving force for more people to decide to upgrade. There is a possibility that
