The mobile phone market is expected to maintain growth this year: the inflection point occurred in the last quarter, and new technologies such as AI facilitated the purchase and replacement of mobile phones

The just-concluded fourth quarter of 2023 will become an inflection point for the mobile phone market, and all parties predict that the mobile phone market will grow in the fourth quarter and will maintain a growth trend this year.

On December 27, a report released by the China Academy of Information and Communications Technology showed that in November 2023, 31.211 million mobile phones were shipped in the domestic market, a year-on-year increase of 34.3%. In October 2023, the domestic market shipped 29.162 million mobile phones, a year-on-year increase of 19.7%. From January to November 2023, the overall shipments of mobile phones in the domestic market totaled 261 million units, a year-on-year increase of 7.1%, of which 215 million 5G mobile phones were shipped, a year-on-year increase of 12.9%, accounting for 82.5% of mobile phone shipments in the same period.

According to IDC statistics, the actual retail sales of domestic smartphones in the third quarter of 2023 have achieved a year-on-year increase of 0.4%, and shipments are expected to also show an inflection point in the fourth quarter.

"The fourth quarter of 2023 did see an inflection point for steady volume growth. It is mainly caused by three factors, one is that the epidemic has not affected the demand for mobile phones as personal information terminals, reducing people's active range and increasing the time for mobile phones; second, the consumption suppressed by the epidemic has begun to be released; and the third is that the decline in purchasing power only affects sales shift downgrade, and has little impact on sales. Zhou Zhang, a science and technology strategy expert and mobile phone industry consultant, said in an interview with the surging news reporter.

In the fourth quarter, new mobile phone products were intensively released, and the market capacity was good

In the second half of 2023, with the return of the Huawei Mate 60 series and the release of Apple's iPhone 15, the mobile phone market will be activated. Honor, vivo, OPPO, Xiaomi, Meizu, ZTE, realme, and others all launched new products in the fourth quarter.

On September 22, 2023, in Hangzhou, Zhejiang, customers queue up at an Apple store in Hangzhou to buy an iPhone 15 series phone. IC photo data map

Judging from the actual market feedback, the overall sales situation is relatively optimistic. According to IDC statistics, the actual retail sales of domestic smartphones in the third quarter of 2023 have achieved a year-on-year increase of 0.4%, and shipments are expected to also show an inflection point in the fourth quarter.

According to a new report from market research firm Counterpoint Research, China's smartphone market is showing signs of recovery, with an average year-on-year increase of 11% in the first four weeks of October. According to Counterpoint's latest report, global mobile phone shipments are expected to increase by 3% year-on-year to 312 million units in the fourth quarter of 2023. Among them, shipments in North America and Europe are expected to be the same as last year, but China and emerging markets such as the Middle East and Africa (MEA) and India have successfully reversed the decline and will become the new growth engine of the smartphone market from the fourth quarter of 2023.

However, the highly competitive mobile phone market, coupled with the return of Huawei, has further intensified market competition, making mobile phone manufacturers relatively cautious about market judgment.

Hu Baishan, executive vice president and chief operating officer of vivo, said in an interview earlier that the competition has become more and more fierce after Huawei's return, and the competition will be more fierce in the next few years, but if the Chinese market is played, there will be no problems in the world, and vivo will have good growth in overseas markets.

Hu Baishan's overall judgment on the mobile phone industry is that mobile phone sales have declined slightly in the past three years due to various reasons, and it is expected that the domestic market will stabilize in 2024 and the overseas market will grow.

Xu Qi, vice president of Realme and president of China, said in an interview with reporters that the total number of mobile phones in China in 2023 will be about 260 million units, and it should increase slightly next year, and there may be a few points of growth, "The consumer use cycle has dropped from more than 30 months to 20 months or more than ten months, and it takes a time cycle, it is a slow recovery process, and I think the direction is good." ”

Xu Qi also said that Huawei's return is indeed a big event in the machine circle, giving more pressure and more impetus to the market, and I hope that everyone will work together to revitalize the Chinese market and enhance the vitality and popularity of mobile phones.

Shopkeeper Zhou predicts that among the Chinese mobile phone brands in 2024, vivo and OPPO camps will be more stable, Xiaomi will be stronger in the global market, Huawei will mainly look at the nova series in terms of volume, and Honor will mainly look at the share of the high-end mobile phone market. "Taking into account a variety of factors, it is estimated that the decline of China's mobile phone industry in 2024 will most likely stabilize, and the 2000-3000 price segment will suddenly rise, that is, the waist will sink. ”

AI large models, satellite communications, and vehicle-machine interconnection will be further applied

Next year, mobile phone products themselves will also bring a series of new technologies and new applications to stimulate consumers to buy or replace phones. For example, the large models of each mobile phone terminal have been implemented on new mobile phones, satellite communication will also be used on more mobile phone brands, and the integration of smart phones and new energy vehicles will be accelerated.

IDC recently released the top ten insights of China's mobile phone market in 2024, which mentioned that mobile AI large models are more widely used.

Major domestic manufacturers have successively deployed mobile AI models. The use of AI models in mobile phones is expected to break the lack of innovation in the mobile phone market for many years, and the demand for higher performance of hardware is also conducive to driving some users to switch phones. However, the real use scenarios of AI large models have not yet been clarified, and voice assistants are still the main landing methods.

Up to now, Huawei has launched a large market model, vivo has released a blue heart model, launched the first mobile phone equipped with a blue heart model, X100 series, and OPPO has launched an Andean model (AndesGPT).

Canalys, a third-party organization, released the latest forecast for the smartphone market, believing that AI mobile phone shipments are expected to reach 60 million units next year.

In addition to the large model, more mobile phones will be equipped with satellite communication services. Huawei was the first to bring satellite communication services into mobile phones, and it has also received positive feedback from consumers. Next, OPPO, Honor and other high-end mobile phones will also be equipped with satellite communication services.

IDC believes that although most consumers rarely use related services in daily use scenarios, satellite communication will still play an important role in special extreme scenarios and become an important choice for high-end products to create differentiation. It is expected that satellite communication services and AI models will significantly enhance the competitiveness of high-end products, and at the same time, it will also help manufacturers further build their brand image.

In addition, the rapid development of new energy vehicles and electric vehicles has made the connection between cars and mobile phones more close.

There is a wave of goods in the supply chain

From the perspective of the industrial chain, the overall market recovery is felt from the upstream of the industrial chain, and mobile phone manufacturers have begun to pull goods from upstream parts.

Some Taiwanese media quoted supply chain sources to reveal that Huawei, Honor and Transsion have a positive attitude towards the smartphone shipment target in 2024. According to preliminary estimates, the three companies will increase their mobile phone shipments by a total of 70 million to 80 million units in 2024, accounting for about 5% of the global mobile phone market.

Specifically, the relevant supply chain estimates that in the incremental expectation of 70 million to 80 million mobile phones, Transsion's mobile phone shipment target in 2024 will increase by 30 million units, and it is currently the only brand challenging double-digit growth. Huawei estimates that sales of new phones are expected to increase by 20 million to 30 million units in 2024. Honor strives to grow 20 million units.

In 2024, driven by the wave of replacement triggered by the introduction of terminal generative AI into the mobile phone market, it is expected to feel a more obvious recovery momentum in the third quarter of next year.

Zhou said that from the perspective of the industrial chain, the competitiveness of China's smartphone industry chain is still unique in the world, and there may be a certain transfer of assembly, or order switching between manufacturers, but overall Chinese enterprises in the traditional mobile phone industry chain in the short term can not see much negative factors.

With the recovery of the mobile phone market, major brokerages are also optimistic about the mobile phone industry chain next year.

Guojin Securities said that the fourth quarter of the smartphone pull continues, from a variety of situations, electronic demand for good signal is obvious, it is recommended to pay attention to the fourth quarter by the mobile phone pull goods, inventory to go faster, the performance is expected to exceed the expected subdivision of the industry and companies, electronic fundamentals are gradually improving, in the medium and long term, AI to consumer electronics empowerment, is expected to bring new replacement demand, optimistic about AI-driven, demand recovery and independent controllable benefit of the industrial chain.

According to the SPDB International report, the popularization of AIGC is expected to stimulate the demand for consumer electronics such as smartphones to return to the growth path, and it is moderately optimistic about the global consumer electronics industry such as smartphones in 2024. Global and Chinese smartphone shipments are expected to grow by 5.0% and 5.1% year-on-year, respectively, in 2024.

SPDB International analyzes that the growth momentum of the industry comes from two aspects. On the one hand, after nearly 2 years of downturn in the smartphone industry and the lengthening of the replacement cycle, the replacement demand of existing users will be partially released on the basis of the freezing point in 2023. The short-term demand for high-end flagship models of the Android brand is expected to continue next year. On the other hand, the recent implementation of AIGC technology on mobile phones, PCs and other devices is expected to stimulate user demand and promote shipment growth. It is expected that more models equipped with Qualcomm and MediaTek's device-side AI capabilities will be launched in 2024. In addition, the return and hot sales of Huawei brand smartphones are likely to become an industry increment in 2024.