Smartphone shipments increased in Q3 as growth continued

Market watchers may not agree on how much smartphone shipments grew in the third calendar quarter of this year, but they do agree on one thing: the market is emerging from its post-pandemic slump.

Global Market Research Company canalis reported on Monday that global smartphone shipments grew by 5% in the third quarter of 2023 compared to the same period in 2023. The increase marked the fourth consecutive quarter of growth, it noted.

Meanwhile, according to his calculations, IDC The growth rate for the same period is 4%, marking the fifth quarter of growth.

Canalys attributed the growth in demand in emerging economies to the early stages of the replacement cycle in North America, China and Europe.

IDC noted that strong growth from Chinese vendors such as Vivo, Oppo, Xiaomi, Lenovo and Huawei led to the increase in Q3 shipments.

Sterling quarter for Apple

Nabila Popal, IDC research director for global client devices, noted that Chinese phone makers were not alone in achieving good growth numbers during the period. “While the growth of Chinese players in emerging markets has been an ongoing theme this year, Apple also enjoyed a 3.5% YoY increase in shipments this quarter due to strong demand for previous models and the launch of the new iPhone 16 lineup.” he said in a statement.

“3 In 2024, the older iPhone models, especially the iPhone 15, performed exceptionally well due to heavy promotion and increased marketing activities around Apple Intelligence,” he noted.

“Despite the staggered rollout of Apple Intelligence in markets outside the US, Apple will continue to grow in the upcoming holiday season as it expects many customers to upgrade from the iPhone 13, iPhone 12 and earlier models to a new AI-enabled smartphone, future-proofing their purchases for the long term, ” Popal prophecy.

According to Canalys, Apple’s Q3 growth enabled it to nearly dethrone Samsung from its top position in the market.

“Apple achieved its highest Q3 volume ever and has never come close to leading the global smartphone market in Q3 so far,” Canalys analyst Runer Bjorhovde said in a statement.

“The market shift towards premium devices, punctuated by an ongoing refresh cycle of devices bought during the pandemic, is benefiting Apple, especially in strong regions like North America and Europe,” he noted.

“Despite a modest initial reception,” he added, “iPhone 16 is expected to help Apple maintain a strong finish in 2024 and momentum in H1 2025, especially as Apple Intelligence expands into new markets and additional languages. support.”

Samsung holds the Catbird seat

According to IDC, Samsung shipped 57.8 million phones in Q3, giving it an 18.3% market share, compared to 59.5 million units and a 19.6% market share in Q3 2023. 17.7% share, compared to 54.1 million units and 17.8% share in Q3 2023.

“Samsung maintains its market leadership despite the decline in total units shipped,” Francisco Geronimo, IDC vice president for EMEA client devices, said in a statement.

“However,” he continued, “the company continues to grow its share in the premium segment as average prices rose during the quarter, driven by a strong mix of Galaxy AI-enabled models.”

“The company has started rolling out Galaxy AI features to other Samsung models and launched the new Galaxy Z Fold6 and Galaxy Z Flip6 Foldable with Galaxy AI, contributing to better performance in the premium segment,” he explained.

“I think improvements in AI capabilities are helping mainstream smartphones look more attractive, and there is an appetite for AI everywhere,” said Anshel Saag, a senior analyst at Moore Insights and Strategiesa technology analyst and advisory firm based in Austin, Texas, told TechNewsWorld

Industry in existential crisis

Canalys analyst Le Juan Chiu noted that the gap between the top five vendors has narrowed, intensifying the competitive landscape.

“Retailers are entering the holiday shopping season with strong momentum and cautious optimism, aimed at attracting consumers who have put off upgrading their devices in anticipation of deals during big events like 11.11 and Black Friday,” he said in a statement.

“However,” he continued, “the importance of effective resource planning cannot be overstated. While market conditions are improving, demand remains fragile as vendors face increasing global challenges in generating demand and regulatory hurdles such as the EU’s Eco-Design Directive.” being.”

“Effective supply chain management, maintaining healthy inventory levels, and optimizing sales and marketing fund allocation are becoming more important for market leadership.”

Bjørhovde told TechNewsWorld that the smartphone industry is now in an existential crisis. “They have to try and find some attraction point that can drive some demand,” he said.

“Right now, it’s all about generative AI,” he continued. “A big part of the reason AI is a big topic is because that’s where a lot of smartphone vendors are looking when it comes to finding new monetization opportunities.”

“But people don’t really understand what a lot of these AI features are,” he maintained. “From an analyst’s point of view, there are really interesting developments that will lead to interesting products and solutions in two, three, even four years’ time. For consumers right now, though, an AI feature is just a fancy editing tool. It’s not really something that greatly differentiates what a smartphone can do.”

Continued growth is projected in 2025

Bjørhovde explained that the smartphone market has become a strategic game. “It’s trying to attract switchers and find opportunities to upsell to users in the face of a clear global trend, which is that phones are being used longer,” he said.

“As much as the goal is to drive people to upgrade, the opposite is happening,” he continued. “In the US, carrier discounts or subsidies are no longer as strong. So, actually finding some add-on features, new revenue streams, new opportunities, leaning towards B2B in some cases, that’s where most of the smartphone vendors are focusing.

He added: “This is an industry that has gone from revolutionary ideas to evolution. I think the industry is living with its own curse because from 2007 to 2015, every release has always been extremely exciting. There was always something unexpected. Now it’s not so exciting.”

The urge to upgrade, however, is stronger at the lower end of the market, he stressed. “Two or three years ago, if you bought a $150 phone, you probably got a 12-megapixel camera and a battery that would last you half a day, maybe all day. Now, you can get around 50 megapixels in the camera. You may have two or three days of battery life. So the upgrade happening in the budget department right now is really quite dramatic.”

Looking ahead to 2025, Sag predicted the market would grow in the low-single-digits, which is normal for a mature market.

Bjørhovde also sees continued market growth. “I think we’re probably looking at a year and a half. And if Apple Intelligence starts picking up some new features and becomes really interesting in a year, that could be a driver to get more people to decide to upgrade at that time.”