• The smartphone market has been showing signs of recovery in the first quarter
• Total revenues have reached their highest-ever level in an opening quarter, according to Counterpoint Research
• The role of AI is set to grow, as vendors mull ways to implement the technology across mid-range devices, Canalys claims

The global smartphone sector has maintained its recovery momentum, recording notable increases in shipments as well as revenues during the first quarter of 2024, according to several analyst companies, which have each published their analysis of the state of the worldwide market during the first three months of the year.  

While their figures varied slightly across the board, the analyst groups were united in concluding that the market is finally healing following a period of contraction and that the current positive momentum is likely to persist throughout the year.

According to Counterpoint Research, global smartphone market revenues grew by 7% year on year, reaching their highest ever first-quarter level. While a specific figure for that total revenue was not disclosed, the company estimated that Apple was responsible for a 41% share of the total market value, followed by Samsung with an 18% share, Xiaomi and Oppo with a 6% share each, and Vivo with a 4% share.

Based on Apple’s first-quarter revenues of almost $46bn from its iPhone product line, that would value the global smartphone sector at about $112bn. 

The analyst firm suggested that the rise in revenues was due to fast growth in sales of more premium devices (those with a price of more than $800), with that segment registering a double-digit growth and representing 18% of all smartphone shipments in the first quarter.

In terms of global shipments, Counterpoint Research estimated there had been a 6% year-on-year increase in the period, to 296.9 million units. This, it stated, was driven mainly by “strong performance” in key regions, such as Europe, Middle East and Africa (MEA), and the Caribbean and Latin America (CALA).

Estimations from another research house, Omdia, painted a slightly more bullish picture of the market: It found that global smartphone shipments climbed 11.6% year on year to 300.4 million units, and suggested this was due to the market stabilising after a period of turbulence, which saw strong demand between the last quarter of 2020 and the third quarter of 2021, followed by supply chain issues in 2022.

In the opening three months of 2024, many smartphone vendors recorded “large double-digit year-on-year growth”, including Xiaomi, Honor, Motorola and Realme, according to Omdia. In the case of Transsion and Huawei, the growth went as hight as triple digits, it stated.

Echoing preliminary data previously shared by IDC, the analyst companies named Samsung the top vendor globally in the period in terms of units shipped, with a 20% market share.

Previously the largest player, Apple fell to second place due to headwinds in key markets such as China. “China is an important market for Apple with the second-largest shipment volume after the United States. However, Apple has been facing intense competition from Huawei in the premium segment of the Chinese local market since the second half of last year, which has contributed to disappointing iPhone shipments in the first quarter. Performance in the Chinese market will be an important factor in determining Apple’s overall shipments this year,” commented Jusy Hong, senior research manager for Omdia’s smartphone group.

The role of AI

The integration of AI capabilities into consumer devices, something that Samsung did at the start of this year with its Galaxy S24 series, is a trend with the potential to bring significant shifts in the market.

According to Sanyam Chaurasia, senior analyst at Canalys, vendors this year will focus on exploring ways to commercialise the generative AI (GenAI) wave, which is “critical for all players within the device ecosystem”.

“The evolution of on-device AI solutions for smartphones depends heavily on strategic alliances among brands, chipset providers and software firms. Vendors will look for open collaboration with industry leaders to bring unique and personalised AI solutions to end users. In the long term, vendors will look to bring these AI features to mid-range price bands to add more users to their native AI ecosystems. 

“Additionally, ecosystem expansion via cross-device integration and strategic partnerships boosts revenue potential, highlighting the profound impact of on-device AI on user experiences and brand profitability,” Chaurasia explained.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV