After several consecutive quarters of decline, the global smartphone market returned to positive growth in the second half of last year. According to the latest data released by market research institutions for the first quarter of 2024, the smartphone industry continues to recover and is basically out of the "turbulent period".
IDC noted that global smartphone shipments in the first quarter rose 7.8% year-on-year to 289.4 million units, the third consecutive quarter of growth is a strong indicator that the recovery is well underway. Canalys gave a higher growth figure, with a year-on-year increase of 11%, Samsung returned to the top of the list, Apple ranked second, and Xiaomi, Transsion, and OPPO ranked third, fourth, and fifth, respectively. Among them, the rapid growth of the two Chinese brands, Xiaomi and Transsion, has stolen Apple's "limelight".
Image source: IDC
Canalys analyst Zhou Lexuan said: "The global smartphone market is off to a good start, with a significant improvement compared to the same period last year. The first quarter of 2023 was a difficult year due to the economic downturn and inflationary pressures. But as the economy stabilizes, new product launches and promotions intensify, the market rebounds, providing a great opportunity for smartphone makers to revive market growth. ”
Every downward cycle is a reshaping of the industrial pattern, and the mobile phone market is no exception. Titanium Media App found that in the new qualifying competition, the brand and the market are quietly changing. On the one hand, mobile phones are no longer a single market competition, China and other mature markets have long entered a period of exhaustion, for the development and occupation of emerging markets, is the key to the future competition.
On the other hand, although the mid-range market is the concentrated position of mobile phone sales, the main potential energy to promote the growth of mobile phones still comes from the high-end market, which is also a higher profit area and is the key to a better life for mobile phone manufacturers. In addition, although there are still debates about whether it is a gimmick or not for AI phones, one thing is certain, brands that do not embrace AI will only accelerate their fallout.
Samsung overtook Apple, and Transsion sat firmly in the top five
In the fourth quarter of 2023, Apple ushered in a highlight moment, surpassing Samsung to become the world's No. 1 with the iPhone 15 series. In addition, Apple also won the first place in the Chinese market for the first time. However, Samsung didn't let Apple sit in the first position for too long. Just one quarter later, Samsung returned to the top with a 20% market share.
The growth of Samsung's mobile phones, in addition to relying on the expansion of entry-level mobile phones in the global market, also comes from the active promotion of AI. At the CES at the beginning of this year, Samsung shouted the slogan of All in AI, and the newly released flagship Galaxy S24 series also featured various AI features. "By continuing to promote Galaxy AI, Samsung has successfully boosted the shipment of its S24 series, which has outperformed the previous generation. Canalys analyst Zhou Lexuan said.
A shopping guide in Shundian Mall also told Titanium Media App that although Samsung Galaxy S24 is not a set of AI applications in China, the addition of AI has also allowed more people to consult and buy.
Image source: Samsung's official website
As for Apple, it encountered various doubts and challenges at the beginning of the year, and the decline in the first quarter was also the largest among the top five, reaching 9.6%. In terms of market share, the gap between Apple and Samsung has also increased from 1.8% to 3.5%. In the view of Titanium Media App, the "decay" of the iPhone is inevitable once it encounters a tough opponent every year. As for the AI that the market has been looking forward to, Apple did not give an answer in the first quarter.
"First, it faces stiff competition from the resurgent Huawei at the high end, while also being squeezed in the middle by aggressive pricing from companies like OPPO, vivo and Xiaomi. "Although the iPhone 15 is a great device, it doesn't have a major upgrade compared to the previous generation, so consumers are temporarily happy with the old generation of iPhones," said Mengmeng Zhang, senior analyst at Counterpoint. ”
It is worth mentioning that even Apple's price reduction promotion is not significant. Judging from the latest released data, Apple's round of price reduction promotion has not aroused much consumer interest, and sales still plummeted by 24% in the first six weeks. Analysts at Wall Street investment bank Jefferies said in a report that Apple's iPhone sales in China fell by 30% in the first week of 2024.
图片来源：Counterpoint
Guo Tianxiang, a senior analyst at IDC China, pointed out that this situation is likely to be due to a change in consumer psychology, with Apple's successive generations of products being upgraded to a smaller extent, and the gap with Android flagship products narrowed, making it at least no longer the first choice in consumer psychology.
"The improvement of the competitiveness of Chinese brands in flagship products is not only the return of Huawei, but also the Xiaomi 14 series, vivo's X100 series, and Honor's folding screen series, all of which have put greater pressure on Apple's market performance. Therefore, the effect after seeing the continuous price reduction since last year is not particularly obvious. ”
Compared with Apple's decline, Xiaomi and Transsion from China grew by 33.8% and 84.9% respectively, becoming the only two brands in the top five to grow. Among them, Xiaomi's third ranking is relatively solid, but unlike the same period last year, with the help of the big sales of the Xiaomi 14 series and the boost of the high-volume model Redmi, the share gap between it and Apple has dropped from 9.3% to 3.2%. The excellent performance at the beginning of the year also made Lei Jun, who devoted himself to building cars, post a message to celebrate, thanking rice noodles for their support.
Image source: Lei Jun Weibo
Another Chinese brand, Transsion, relied on its efforts in emerging markets such as Africa to sit in the top five, with a market share of 9.9%. It should be pointed out that since Transsion is not sold in the Chinese market, many Chinese people are not impressed with it.
According to public information, Transsion's main products are mobile phones under the three major brands of TECNO, itel and Infinix, including feature phones and smartphones. The sales area is mainly concentrated in the global emerging market countries such as Africa, South Asia, Southeast Asia, the Middle East and Latin America. In 2019, Transsion, known as the "King of African Mobile Phones", was listed on the Shanghai Stock Exchange.
Image source: Transsion official website
According to the annual report released by Transsion Holdings, its revenue in 2023 will be 62.392 billion yuan, an increase of 33.9%, and its net profit will increase by 121.55% to 5.503 billion yuan. Transsion's rapid growth is also benefiting upstream manufacturers. Thanks to Transsion's orders, emerging ODM vendors MobiWire and Innovatech have also achieved strong growth.
Emerging markets, the new battlefield of smartphones
The growth in the first quarter of the year is a good start for 2024, and many institutions have also given optimistic expectations for this year's mobile phone market. A report released by market research agency Counterpoint Research estimates that global smartphone shipments will reach 1.2 billion units in 2024, a slight rebound of 3%.
For the rebound of the mobile phone market this year, Titanium Media App believes that in addition to the promotion of the brand's own product power, more or more is that the market has bottomed out last year, falling to the lowest level in ten years. Mature markets like China, despite their size, have little room for growth, and if they want to seek new growth, they will depend on the performance of emerging markets.
Previously, IDC revealed that Transsion ranked first in smartphone shipments in Africa, Pakistan, Bangladesh, and the Philippines. Transsion's performance is enough to show that emerging regions such as Africa, Southeast Asia, and Latin America are new battlefields for mobile phone manufacturers.
According to data released by Canalys, emerging markets will still usher in significant growth in 2023, when they have fallen to a low point. Among them, in the fourth quarter of 2023, the African smartphone market shipments reached 19.2 million units, a year-on-year increase of 24%, the Latin American smartphone market also achieved a 20% growth, and the Middle East smartphone shipments (excluding Turkey) reached 12.2 million units, a year-on-year increase of 24%, and the total shipments for the whole year of 2023 reached 42.5 million units, an increase of 11% compared to 2022.
In January 2024, smartphone shipments in Southeast Asia's top five markets soared to 7.26 million units, up 20% year-on-year. Canalys expects Malaysia's smartphone market to grow by 9.5% year-on-year to 9.8 million units in 2024.
Guo Tianxiang, senior analyst at IDC China, told Titanium Media App that for emerging markets, including Latin America, Asia-Pacific, the Middle East and Africa and other countries and regions, the mobile phone industry is still in an incremental era. However, due to the underdeveloped national economy, limited consumer budgets, telecommunications and Internet infrastructure still need to be improved, and most countries are still in the stage of development to 4G, so the demand in these countries and regions is more concentrated in low-end products, cost-effective products, and even feature phones.
Driven by emerging markets such as India, the Middle East and Africa (MEA) and the Caribbean and Latin America (CALA), the market for affordable handsets ($150 to $249) has seen growth this year, rebounding 11% year-on-year, according to Counterpoint analysis. With inflationary pressures easing significantly across Africa, local currencies stabilizing in many countries and consumer purchasing power recovering have driven a rapid recovery in the segment's mobile phone market.
Steady investment in the Middle East, Africa, and Latin American markets by Chinese manufacturers such as OPPO, vivo, Xiaomi, and Transsion has intensified market competition and spurred demand for affordable smartphones. Canalys analyst Zhou Lexuan said manufacturers are investing more in emerging regions such as Latin America and Southeast Asia, which have a thriving middle class and continue to see smartphone penetration rise compared to already saturated markets, while a preference for high-end models is also rising.
Huawei, Xiaomi, etc. are pouring in, and the high-end market is no longer calm
The mobile phone market is like a "spindle", with the mid-range accounting for a large number of sales. However, from the perspective of growth, the entire market is "dumbbell-shaped", and the high-end and low-end markets are responsible for growth.
As for the high-end market, IDC data shows that in 2023, although smartphone shipments will decline by 3.4%, the average selling price will increase by 8%. Of those, 22% of smartphones cost more than $800.
Counterpoint estimates that the high-end market ($600-$799) will grow by 17% year-over-year in 2024, with Apple and Huawei likely to lead the growth of the high-end market. Among them, the evolution of folding screens is a stimulating factor, and with the blessing of AI, the high-end market has more highlights this year.
图片来源：Counterpoint
As we all know, Apple has never been the mobile phone brand with the highest annual sales, but it is unique in terms of profits, and once took more than 9% of the industry's profits. For many years, domestic mobile phones have been challenging Apple, and Huawei once succeeded in the challenge, but due to external reasons, most of the market has shifted to Apple, and only a small part is occupied by other domestic mobile phones.
At present, Huawei is fully back, and the high-end market has a new focus. A clear sign is that at the beginning of the year, there was a strong contrast between the sales of Huawei and Apple, with the former soaring 64% and the latter plummeting 24%.
In terms of the performance of the folding screen, Huawei is also full of momentum at present. According to DSCC, in the first quarter of 2024, the foldable phone market is expected to grow by 105% year-on-year, surpassing Samsung in the foldable screen phone market for the first time. With the recovery of production capacity and the full product line, Huawei is regaining the original lost users.
Not only that, Xiaomi has made a new breakthrough in the high-end market with the success of the 14 series. Joint research and development with Leica has made Xiaomi more competitive. The biggest challenge at the moment is more about how to get Xiaomi to change consumers' perception of its brand in high-end markets such as Europe and build a high-end brand perception.
In addition, the addition of AI has also given high-end mobile phones a new story. At present, domestic mobile phones have to go further in the integration of AI, and the "conservative" Apple has to invest heavily in AI research and development in view of the pressure of the market.
"Manufacturers are seizing new opportunities by promoting high-quality products, such as advanced AI features and services on flagship products, as well as adopting eco-based product strategies," said Canalys analyst Lok Hin Chow. There is a good chance that Apple will unveil its AI strategy in 2024, which will provide the brand with an opportunity to drive the development of its high-end products and rekindle product innovation across the ecosystem. ”
Titanium Media App believes that the growth of high-end is also reflecting people's requirements for high quality and high standards, and brands need to compete in higher-end markets and establish their own positions to ensure the brand's ability to resist pressure and risk. As for the mobile phone market, which seems to be doing well, there are still many potential crises, such as the extension of the user replacement cycle, the regulation of inventory, and how to balance the terminal price under the pressure of increasing AI costs. (This article was first published in Titanium Media APP, author | Du Zhiqiang, editor - Zhong Yi)