Apple is missing out on a major 2024 smartphone market, IDC says

On By Littum

(Bloomberg) — Global smartphone sales rose sharply in 2024 after two consecutive years of decline, but Apple Inc. ( AAPL ) barely managed growth, an independent study showed, underscoring the speed at which Android-based rivals are gaining ground in China and emerging. markets.

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Apple and its rivals will ship 6.2% more phones, or an estimated 1.24 billion units, in 2024, according to market tracker IDC. But iPhone volume likely only rose 0.4% higher. Still, Apple remains by far the profit leader with an average selling price exceeding $1,000, while Android rivals combined came in at around $295, IDC estimates.

YICHANG, CHINA - OCTOBER 21, 2024 - Apple iPhone16 phones are displayed at a store in Yichang, Hubei Province, China, October 21, 2024. According to research firm Counterpoint, sales of Apple Inc's new iphone16 in the Chinese market increased by 20 percent in the first three weeks after launch compared to iPhone15 in 2023. (Photo credit should read CFOTO/Future Publishing via Getty Images)
Apple iPhone16 phones are displayed at a store in Yichang, Hubei province, China, on October 21, 2024. (CFOTO/Future Publishing via Getty Images) · CFOTO via Getty Images

The latest study highlights the uneven recovery of the smartphone market, which declined in the post-Covid era despite the rise of AI. Much of the growth in 2024 came from pent-up demand and regions with lower smartphone penetration, IDC said. More affordable devices from Android vendors helped Chinese brands better capture this opportunity, while Apple is expected to do better next year.

The addition of artificial intelligence enhancements, a major theme among e.g. Samsung Electronics Co. (005930.KS, SSNLF), Apple and Alphabet Inc.’s (GOOG, GOOGL) Google, failed to excite consumers.

“While GenAI remains a hot topic and top priority for many vendors, it has yet to significantly impact demand and drive early upgrades,” said Nabila Popal, research director at IDC. “More investment is needed to increase consumer awareness and introduce a ‘must have’ feature that will rush consumers to the store and create the super cycle everyone is waiting for.”

Brands like Xiaomi Corp. (XIACY, 81810.HK) and Huawei Technologies Co. are investing in hardware and designing their own processors — in an effort to mitigate the threat or impact of US sanctions while adapting their designs for AI use. Huawei on Tuesday introduced its latest smartphone powered by its made-in-China chips, while Xiaomi is preparing an in-house semiconductor for 2025 devices.

In China’s fiercely competitive market, where a half-dozen companies trade first each quarter, deep and prolonged discounts stimulated sales. These had more impact than in the previous year, although concerns about the country’s ailing economy are likely to continue.