Global Smartphone Market Rebounds Strongly in 2024, but Future Growth to Slow

Global Smartphone Market Rebounds Strongly in 2024, but Future Growth to SlowIDC's latest Global Quarterly Mobile Phone Tracker reveals a projected 6.2% year-over-year growth in global smartphone shipments for 2024, reaching 1

Global Smartphone Market Rebounds Strongly in 2024, but Future Growth to Slow

IDC's latest Global Quarterly Mobile Phone Tracker reveals a projected 6.2% year-over-year growth in global smartphone shipments for 2024, reaching 1.24 billion units. This robust growth follows two consecutive years of sharp decline, driven largely by pent-up demand for device upgrades. However, IDC predicts this rebound to be short-lived. Growth is expected to decelerate to low single digits starting in 2025, with a compound annual growth rate (CAGR) of just 2.6% from 2023 to 2028.

The report attributes this slowing growth to several factors. Firstly, smartphone penetration is increasing, leading to market saturation. Fewer new users are entering the market. Secondly, the smartphone replacement cycle is lengthening, with consumers holding onto their devices for longer periods. Finally, the rapidly growing secondhand smartphone market is impacting sales of new devices, offering more budget-friendly options.

Nabila Popal, Senior Research Director, IDC Worldwide Mobile Phone Tracker, notes that while Generative AI (GenAI) is currently a hot topic and a priority for many vendors, it hasn't yet significantly impacted smartphone demand or driven early upgrades. "While we still believe GenAI will revolutionize the user experience in the coming years, more investment is needed to increase consumer awareness and deliver 'must-have' features to entice consumers to rush out and buy, creating that much-anticipated super cycle," she stated. Currently, GenAI smartphones are primarily concentrated in high-end flagship devices, gradually penetrating the lower-priced market. IDC forecasts that GenAI smartphones will account for 70% of the smartphone market by 2028.

Android fueled much of the 2024 smartphone market growth, exhibiting a 7.6% year-over-year increase. This growth is largely concentrated in regions like Asia/Pacific, Latin America, the Middle East, Africa, and China, which are dominated by lower-end device sales. This strong low-end segment growth was crucial to the overall 6.2% increase for 2024. In contrast, iOS is projected to grow by only 0.4% in 2024. While Apple achieved record results in emerging markets like India, it faced challenges in large markets such as China, the US, and Europe. However, IDC forecasts a reversal in 2025, with iOS projected to grow by 3.1%, exceeding Android's projected 1.7% growth.

Beyond overall market trends, foldable phones remain a focus. Anthony Scarsella, Research Director, IDC Worldwide Mobile Phone Tracker, points out that while sales remain relatively low, new foldable models continue to attract attention. However, foldable phone shipments decreased by 7.4% in Q3, even with most major global vendors launching new models. IDC predicts 10.5% growth for foldables in 2024 and double-digit growth until 2028, with a five-year CAGR of 15.9%. However, the growth rate is slowing as Chinese vendors, key drivers of the foldable market, shift their focus and investment to GenAI smartphones. Durability concerns and a lack of unique use cases also constrain further market expansion.

In conclusion, while the global smartphone market shows a strong rebound in 2024, this growth is unsustainable. Increasing penetration, lengthening replacement cycles, and the rise of the secondhand market present significant challenges. While GenAI holds the promise of revolutionizing the user experience in the coming years, its impact on market demand remains to be seen. The foldable phone market, while possessing significant potential, faces a risk of decelerating growth. IDC's report offers valuable market insights, providing crucial guidance for vendors in formulating future strategies. The smartphone market will become increasingly competitive, demanding continuous innovation for vendors to maintain a strong position. The interplay between GenAI, foldable technology, and the traditional smartphone market will be crucial in determining the future of the industry over the coming years. Vendors must closely monitor market dynamics and adapt their strategies accordingly to thrive in this evolving landscape. This will be an era of both opportunity and challenge, with success favoring those who can keenly anticipate and respond to market trends. Consumers will benefit from a wider array of more powerful and versatile smartphone options. 2024 marks a turning point for the smartphone industry, with even more exciting chapters yet to unfold, shaped by vendor strategies and evolving consumer demands. The future is uncertain but full of potential.