Global Smartphone Market Report 2024: Growth Rebounds, but AI-Driven Upgrade Cycle Fails to Materialize

Global Smartphone Market Report 2024: Growth Rebounds, but AI-Driven Upgrade Cycle Fails to MaterializeOn Monday, Counterpoint Research, a third-party market research firm, released its 2024 global smartphone market report. The report reveals a 4% year-over-year growth in the global smartphone market in 2024, marking a recovery after two consecutive years of decline and ending 2023's decade-low performance

Global Smartphone Market Report 2024: Growth Rebounds, but AI-Driven Upgrade Cycle Fails to Materialize

On Monday, Counterpoint Research, a third-party market research firm, released its 2024 global smartphone market report. The report reveals a 4% year-over-year growth in the global smartphone market in 2024, marking a recovery after two consecutive years of decline and ending 2023's decade-low performance. However, the anticipated surge in upgrades driven by Apple's AI-powered iPhones failed to materialize, deviating from Wall Street's predictions.

Counterpoint Research Director Tarun Pathak stated, "After a challenging 2023, 2024 was a year of recovery and normalization. Smartphones remain indispensable products, crucial to people's daily lives." He noted that the market rebounded starting in the fourth quarter of 2023, driven by easing macroeconomic pressures, and has maintained growth for five consecutive quarters. "Almost all markets saw growth, primarily Europe, China, and Latin America."

However, the growth wasn't evenly distributed. Data shows Apple's iPhone market share dipped to 18% in 2024, with Samsung also experiencing a decline. Meanwhile, Chinese brands like Xiaomi and Vivo gained significant market share. Apple's sales declined by 2% year-over-year, contrasting sharply with the global market's 4% growth.

Counterpoint Senior Analyst Ivan Lam pointed out that despite the decline in iPhone unit sales, consumers are shifting towards Apple's ultra-premium offerings, partially offsetting the sales drop. "For example, in Q4 2023, Pro and Pro Max models accounted for around 45% of total iPhone sales in China, but we might see that percentage exceed 50% in Q4 2024." This trend reflects Apple's success in the high-end market but also suggests competitive pressure in the mid-to-low range.

Among major brands, Xiaomi experienced the most rapid growth, achieving a 14% global market share. This success is attributed to its product portfolio repositioning, push into the high-end market, and aggressive expansion activities. OPPO, ranked fourth, saw a year-over-year share decline but exhibited stronger momentum towards the end of the year. Vivo secured a top-five position thanks to strong performances in India and China.

AI Fails to Trigger Upgrade Cycle: Expectations vs. Reality

Wall Street had high hopes for Apple's AI-powered iPhones, but the actual performance fell short of expectations. Wedbush Securities' prominent analyst Dan Ives previously predicted the iPhone 16 would be Apple's "most successful iPhone ever" due to its AI features, estimating around 300 million iPhones globally were over four years old. He projected record sales of 240 million or more new iPhones in fiscal 2025, fueled by an AI-driven upgrade cycle.

However, this optimistic prediction wasn't universally shared. Goldman Sachs analysts Allen Chang and Verena Jeng noted last month that Apple faces significant challenges in the Chinese market, highlighting the competition from Chinese brands offering AI-enabled phones at prices as low as $168.

Prominent Apple analyst Ming-Chi Kuo also expressed caution regarding iPhone sales projections last week. He anticipates 2025 iPhone shipments between 220 and 225 million units, lower than the widely expected 240 million or more. Kuo cited a "cautious stance" by Apple in discussions with suppliers regarding this year's iPhone production plans, referencing anticipated weakness in the Chinese market and questioning whether Apple's AI features could accelerate the iPhone upgrade cycle or boost its services business.

In conclusion, the 2024 global smartphone market experienced growth, but this wasn't driven by the anticipated AI-fueled upgrade cycle. Apple, while maintaining competitiveness in the high-end segment, saw declines in overall sales and market share. Chinese brands benefited from their competitiveness in the mid-to-low end and aggressive expansion strategies, gaining significant market share. Future market trends will largely depend on macroeconomic conditions, brand product strategies, and the actual impact of AI technology in smartphones. Whether Apple can reverse its decline and whether AI ultimately drives a large-scale smartphone upgrade cycle remain key areas of focus. The increasingly intense competition demands continuous innovation from all brands to thrive in the evolving market. Consumer demand fluctuations significantly influence market trends; companies must accurately understand consumer needs to develop products and services effectively. The 2025 market performance will be a crucial test of brand strategies and predictions.