Signs of recovery are emerging IDC: China's smartphone shipments increased by 6.5% year-on-year in the first quarter of 2024

Every reporter: Wang Jing Every editor: Zhang Haini

The smartphone industry, which has been in the doldrums for several years, has rebounded and is showing signs of recovery.

On April 25, IDC, an international data company, released a tracking report on China's mobile phone market for the first quarter of 2024. According to the data, the overall shipment of China's smartphone market was about 69.26 million units, a year-on-year increase of 6.5%, and the market performance was higher than expected.

In terms of manufacturer rankings, Honor's market share in China in the first quarter was 17.1%, a year-on-year increase of 13.2 percentage points, while Huawei's share after the full return reached 17%, tied with Honor for the first place in the Chinese market (with a difference of 0.1% or less in unit shipments, IDC will tie for the ranking), while OPPO, Apple and vivo ranked third to fifth, with market shares of 15.7%, 15.6% and 14.6% respectively.

Previously, the market had been hotly discussed, and Huawei's return to Glory would be the most affected, but judging from the data, Honor did not decline, but Apple's share in the domestic market declined. IDC said, "Thanks to the market performance of manufacturers such as Honor and Huawei, the overall Android market increased by 9.3% year-on-year, but Apple still faces greater competitive pressure, down 6.6% year-on-year." Despite the continuous price adjustment promotion, Apple is facing increasing challenges and pressure from competing products, and the agency believes that Apple urgently needs to upgrade and innovate from software and hardware to attract consumers.

Image source: Visual China-VCG41N1331242936

AI has become the focus of competition

From the perspective of gaps, the market competition in the first quarter can be described as fierce, and the gap between the top five manufacturers in terms of market share is only within 3 percentage points. Among them, Huawei is the biggest variable in the current domestic market. Since 2019, Huawei terminals have experienced a long "cold winter". Huawei's share of the domestic smartphone market fell from 46% in the second quarter of 2020 to single digits when products could not be delivered normally. However, with the release of Huawei's mobile phone Mate 60 series in the second half of last year, its market share began to recover rapidly.

Judging from the focus of competition among major manufacturers this year, smartphone manufacturers are still continuing to explore new AI applications. IDC believes that the landing and use of AI models is still the key to the differentiated competition between Android phones and iOS in the high-end market. "AI mobile phones have become an important factor for all manufacturers to lead the future and stimulate market growth and development. Wang Jiping, vice president of IDC China, said recently.

In fact, since the second half of last year, whether it is a high-end flagship or a mid-range product, new mobile phone products have been launched one after another are inseparable from the keyword AI, and even Apple, which has not announced the progress of AI technology, has recently said that the company is actively developing generative AI software features, and will introduce new Siri features supported by large language models in iOS 18.

In March this year, Apple CEO Tim Cook also said to the media that the company's AI has been used in all aspects of Apple products. Apple's generative AI will be announced later this year. Cook said that Apple has seen "incredible breakthrough potential in generative AI, which is why we're investing heavily in this area right now." Apple believes that this will bring revolutionary opportunities for users in terms of productivity, problem-solving, and more.

"Now the progress of AI every day is earth-shaking, and there may be a leapfrog upgrade every once in a while, which must be the top priority for mobile phone hardware manufacturers in the next direction of science and technology. AI phones have the wisdom to continuously learn and iterate on themselves, and now it may be more about what we are teaching them to do, and in the future it will even become a very important assistant in your life. Xu Qi, global vice president of realme and president of China, said when talking about AI a few days ago.

Obviously, the concept of "AI + mobile phone" has become a strong consensus in the industry, and 2024 is even called the "first year of AI mobile phones". However, Honor CEO Zhao Ming emphasized that mobile phone AI is not equal to AI mobile phone. "AI mobile phone means using AI to reconstruct and enable mobile phone applications and operating systems, as well as all aspects of consumer experience and business logic. "From the perspective of development path, unlike the AI large model of third-party application service providers on the cloud side to provide AI functions, the development direction of Honor AI mobile phones is to reconstruct the operating system with AI.

In addition, in March this year, Zhao Ming also shared further thoughts on device-side AI and proposed a four-layer architecture of AI: the first layer uses AI to integrate across systems and devices, the second layer uses AI to reconstruct the operating system of a single terminal, so that the terminal understands you more and is easier to use, such as a new human-computer interaction method based on intent recognition, and the third layer is the application of AI on the device side. For example, application-level AI such as cutouts, photo rendering, and document summarization, and the fourth layer is the device-cloud collaboration of AI, which realizes the presentation of network-side AI such as AIGC and network large models on mobile phones.

Although the current proportion of AI mobile phone products in the overall mobile phone market is not large, Wang Jiping believes that "in terms of long-term driving force, although we expect global AI mobile phones to account for about 15% this year, such a proportion may make more and more people buy AI smartphones, and as AI moves from high-end to mainstream models in the next few years, its driving force will be greater."

Talking about the share of the domestic high-end market in the first quarter of this year, Wang Jiping said: "Although the domestic high-end market of more than 600 US dollars still has the largest share of Apple, it is in a downward trend, and its share has dropped from nearly 70% in the same period last year to about 56% this year; the second place is Huawei, the biggest problem is supply constraints, resulting in no further increase in share; Honor ranks third, relying on its Magic6 series and folding screen, the brand's high-end market share is close to 10% , shipments increased by more than 100% year-on-year. ”

Regarding the overall market performance of smartphones in the first quarter of this year, Guo Tianxiang, research manager of IDC China, commented that China's smartphone market in the first quarter of 2024 achieved a "good start" and was higher than expected, indicating that the entire industry is showing a positive trend. The intensification of competition among leading manufacturers and the strategic differentiation of each company have made the market pattern full of uncertainties this year. At the same time, it should be noted that consumers are still cautious about the replacement and purchase demand for electronic products, and the national policy is also more inclined to promote the purchase and replacement of new energy vehicles and major appliances, so the entire mobile phone industry still needs more innovation and breakthroughs, through more attractive products to promote consumers to replace their phones, and continue the current good trend of China's smartphone market.

Folding screen mobile phones continue to grow

In addition to the straight board machine, the folding screen is still the key to the differentiated competition between Android mobile phones and Apple in the high-end market.

IDC data shows that in the first quarter of 2024, China's folding screen mobile phone market continued its rapid growth trend, with shipments reaching 1.86 million units, a year-on-year increase of 83%. Starting from the Honor Magic V2 series in the second half of last year to the vivo X Fold3 series this quarter, horizontal folding screen mobile phones are gradually solving the shortcomings such as heavy and indurable, poor battery life, large gap between image and straight board machine, and high price. The solution of these problems means that the technology and experience of folding screen mobile phones are further maturing, coupled with the decline in price, which is expected to further promote the penetration rate of folding screen mobile phones and make them more recognized by consumers.

At present, Apple is the only mainstream mobile phone manufacturer that has not launched a folding product. However, Ming-Chi Kuo, a well-known analyst at Tianfeng Securities, said on social platforms last month, "Recently, I have been asked many times whether Apple plans to mass-produce foldable iPhones or iPads in 2025 or 2026." According to my latest research, the only foldable product that Apple currently has a clear development timeline is the MacBook, which has a 20.3-inch display and is expected to be mass-produced in 2027." This is regarded by the outside world as perhaps Apple wants to test the water in the field of folding products through MacBook and other products, and strategically Apple hopes to conduct a training around the stability and ecology of foldable technology for the iPhone in advance.

In terms of manufacturer rankings, in the first quarter, Huawei Mate X5 and the new Pocket 2 helped it to maintain its first place, with a share of 44.1%, since the release of Magic V2, Honor has grown rapidly in the folding screen market, ranking second with a share of 26.7% in this quarter, and vivo ranked third with a share of 12.6%; OPPO gained a 9.0% market share with strong sales of vertically folded products, while Samsung ranked fifth with a 5.9% market share.

Wang Jiping said: "For the global folding market, we believe that there will be an increase of about 37%, the overall demand in the scale of about 79 million units, from the domestic point of view of the most important feature is that from the second half of last year we quickly led the global folding market from vertical to horizontal transformation." In fact, in February this year, some manufacturers were wavering on the strategy of vertical folding products.

National Business Daily