The smartphone market has been showing signs of recovery and growth in the third quarter of 2024, following a period of uncertainty and stagnation due to the COVID-19 pandemic. Market research firms such as Canalys and IDC have reported positive growth figures, indicating a resurgence in demand for smartphones globally.
According to Canalys, worldwide smartphone shipments grew by 5% in Q3 2024 compared to the same period in 2023. This marks the fourth consecutive quarter of growth, signaling a strong recovery for the industry. IDC, on the other hand, pegged the growth at 4% for the same period, marking the fifth straight quarter of growth. Both firms attributed the growth to increased demand in emerging economies and the early stages of a replacement cycle in key markets such as North America, China, and Europe.
Chinese smartphone vendors such as Vivo, Oppo, Xiaomi, Lenovo, and Huawei played a significant role in driving the surge in shipments during Q3. However, Apple also had a standout quarter, with a 3.5% year-over-year growth in shipments. The success of Apple can be attributed to strong demand for previous models and the launch of the new iPhone 16 lineup, which introduced Apple Intelligence features to the market.
Apple’s strong performance in Q3 nearly allowed it to overtake Samsung as the leading smartphone vendor globally. Canalys Analyst Runar Bjørhovde noted that Apple achieved its highest third-quarter volume to date and was on the verge of claiming the top spot in the market. The shift towards premium devices and the ongoing refresh cycle of devices purchased during the pandemic have benefited Apple, particularly in regions like North America and Europe.
While Apple made significant gains in Q3, Samsung retained its market leadership despite a slight drop in total units shipped. The company’s focus on the premium segment, with the introduction of new Galaxy AI-enabled models like the Galaxy Z Fold6 and Galaxy Z Flip6, contributed to its performance in the market. The increasing average prices of smartphones driven by a stronger mix of premium models also played a role in Samsung’s market share.
Analysts believe that the smartphone industry is at a crucial juncture, facing an existential crisis as it navigates changing consumer preferences and market dynamics. Bjørhovde highlighted the importance of generative AI as a key focus for smartphone vendors looking to drive demand and differentiate their products. However, he noted that consumers may not fully grasp the potential of AI features in smartphones at present.
Looking ahead to 2025, market analysts project continued growth in the smartphone industry, albeit at a slower pace. The market is expected to grow in the low-single digits, reflecting the maturity of the industry. As vendors look for new revenue streams and opportunities to drive upgrades, the focus will be on attracting switchers and upselling to existing users. The low-end segment of the market, in particular, is witnessing significant upgrades in features and performance, making it an attractive option for budget-conscious consumers.
Overall, the smartphone market is poised for continued evolution and innovation as vendors adapt to changing market conditions and consumer demands. With the introduction of new technologies and features, the industry is set to continue its growth trajectory in the coming years.
