Demand ‘remains challenged in many markets,’ IDC said; gen AI smartphones expected to grow rapidly
The second quarter of 2024 marked the fourth consecutive quarter of growth for the smartphone market, according to preliminary quarterly data from IDC, with global shipments up 6.5% since the same period last year. That translates to about 285.4 million units during the quarter.
However, the analyst firm warned that demand has yet to fully recover and “remains challenged in many markets.”
“While recovery is well under way with the top five companies all making year-over-year gains, we are seeing increasing competition amongst the leaders and a polarization of price bands,” said Nabila Popal, who is research director for IDC’s Worldwide Tracker team. “As Apple and Samsung both continue to push the top of the market and benefit the most from the ongoing premiumization trend, many leading Chinese OEMs are increasing shipments in the low end in an attempt to capture volume share amidst weak demand. As a result, the share of mid-range devices is challenged.”
Popal also said that that the smartphone market is seeing higher than average selling prices and buzz from gen AI smartphones—which, she added, are expected to grow rapidly and see 234 million in shipments this year, to capture nearly 20% of the smartphone market. She said that generative AI smartphones are expected to “grow faster than any mobile innovation we have seen to date.”
In terms of relative market position, IDC said that Samsung’s AI strategy helped it hold on to the top position with 18.9% share of shipments, with Apple in second place at 15.8%, Xiaomi in third at 14.8% share and Vivo and Oppo in a dead heat for fourth at about 9% of the market each. “As competition increases, IDC expects a very positive and interesting second half of the year with a tight race among the leading OEMs,” the firm noted.
“The growth in 2Q24 continued to provide some relief to the OEMs, though it’s partly supported by a low comparison base and the overall recovery is still at a soft pace,” said Will Wong, who is senior research manager for client devices at IDC Asia/Pacific. “Some OEMs took a less aggressive move in 2Q24 amid the [bill of materials] costs pressure, which prompted the companies to refine the product specs or pricing to ensure profitability. Nevertheless, the second quarter is more like a prelude before more Gen AI smartphones are launched in the second half of the year, which will potentially be the next growth driver after 5G and foldables.”
