The global smartphone industry seems to be showing promising signs of recovery as we look towards 2024. After experiencing a downturn characterized by consecutive years of negative growth, forecasts indicate a rebound where shipments are estimated to grow by approximately 6.8% year-on-yearThis resurgence is fueled by a robust demand in the premium market, coupled with a wave of consumers who had previously opted for mobile devices during the pandemic now embarking on their next upgrade cycleAccording to Sigmaintell, a research firm, global smartphone shipments for 2024 are projected to reach around 1.18 billion units, marking a significant shift in market sentiment and a potential for sustained confidence moving forward.

When analyzing the competitive landscape, it appears that the hierarchy among the top players is stabilizingSamsung, Apple, and Xiaomi continue to dominate the global smartphone shipping scene as the top three manufacturersHowever, the fierce competition, particularly between Samsung and Apple, is expected to intensify, with predictions suggesting an extremely competitive environment in 2025.

Leading the pack is Samsung, expected to ship about 220 million units in 2024, representing a slight decline of 1%. The pressure within the mid-tier and budget segments seems to be notably challenging as local brands ramp up their efforts in emerging markets, emphasizing value propositions within the 5G segmentThe demand for Samsung's A series appears to be lackluster, reflecting the mounting competitionHowever, Samsung is betting on advancing AI technology to enhance personalized user experiences, particularly with its flagship devicesThe company is likely to focus on refining its product mix to strengthen its mid-to-lower end offerings, which are increasingly threatened by domestic competitors entering new markets.

In the second position is Apple, also projected to sell around 220 million units in 2024, with a marginal decline compared to the previous year

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While questions around hardware innovation persist within the iPhone lineup, Apple has maintained a strong foothold in the premium market through consistent brand positioning and credibility garnered over the yearsAs shipments continue to become more closely aligned with Samsung's, the market share differential is noted to be merely 0.5%. The competition between these two tech giants is anticipated to escalate in 2025, especially if Samsung opts to prioritize its profit margins over unit shipments, potentially leading to a shift in market leadership.

The domestic market in China has seen remarkable growth, particularly among non-Apple brandsSigmaintell reports that the Chinese smartphone market is expected to see shipments of around 280 million units in 2024, representing a 4.7% increase year on yearWith domestic brands taking the lead, it is becoming increasingly clear that Apple faces mounting pressure from these local competitors, especially in the premium sector.

Vivo, for instance, expects to secure the top spot with approximately 49.1 million units shipped domestically in 2024, marking a 6.7% increaseThe company's strategy of diversifying its X series towards high-end appeal has shown promising results, particularly with the X100S modelAdditionally, its sub-brand, iQOO, has become an essential player, capturing the interest of many young consumers due to its focus on performance, battery life, and competitive pricing.

Huawei follows closely, reporting roughly 45.4 million units shipped and a market share of 16.1%. Bolstered by its advancements from Kirin chipsets to the Harmony OS, Huawei's Nova series is leveraging its traditional strengths while making inroads into the high-end marketNevertheless, Huawei's performance in 2025 could remain challenging; despite a resurgence from its self-developed technologies, the true user experience must be aligned with its elevated brand perception.

OPPO, Honor, and Apple find themselves in a competitive race for the 3rd to 5th positions, with market shares fluctuating around 15.3%. This heightened competition reflects an increasingly fierce battle among brands

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Although Apple has made strides in AI, domestic brands are proliferating in the high-end AI sector, leaving Apple trailing in implementing its advanced AI features domestically; significant deployments may not be seen until the first half of 2025. With national subsidy policies likely to exclude products priced above 6000 yuan from upcoming rebates, Apple's domestic shipments are expected to face challenges.

Looking ahead, demand for smartphone upgrades is anticipated to remain strong, with a structural shift in the replacement demand becoming more pronounced in 2025. Predictions suggest that global smartphone shipments may reach 1.23 billion units in 2025, reflecting a 4.0% year-on-year increaseWithin the domestic market, thanks to various national subsidy implementations, smartphone shipments are likely to hit 300 million units, growing by approximately 4.9%.

Sigmaintell emphasizes that as the growth environment stabilizes, the discussion on how brand manufacturers can maximize volume and profitability will be paramount going into 2025. With the potential advantages arising from multiple factors, including the ongoing AI technology cycle and replacement trends, brands must strategically navigate through challenges regarding currency exchange rates, material cost controls, stable supply prospects, and appropriate inventory management.

While structural growth is anticipated, both high-end and budget categories are projected to see significant expansionsIn a context where consumer spending habits are diversifying amidst slowing global economic growth, brands are not only aiming for higher-end offerings but are also intensifying their efforts in the budget space to capture price-sensitive consumers’ upgrade needs.

Additionally, the requisite for product upgrades within the smartphone market remains crucialDespite AI applications not yet heralding a groundbreaking transformation, they are nonetheless resulting in increased hardware costs, with a clear surge in the expenses tied to flagship components

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