The global smartphone market is on track for a strong recovery in 2024, with expectations of a 6.2% year-over-year increase in shipments, totaling 1.24 billion units. This rebound follows a period of two consecutive years of declining sales, fueled largely by pent-up demand for device upgrades, particularly in emerging markets where smartphone penetration continues to rise. As we look toward the future of the smartphone industry, various factors including Android dominance, the rise of foldable phones, and the impact of generative AI (GenAI) will shape the trajectory of the market.
Factors Behind the 2024 Smartphone Market Growth
Android Growth Driving the Recovery
Android-powered devices are at the heart of the market rebound, contributing significantly to the overall growth. Projections show a 7.6% year-over-year increase in Android shipments, primarily driven by rising demand in emerging markets such as Asia-Pacific, Latin America, the Middle East, Africa, and China. These regions have seen a surge in the adoption of affordable Android smartphones, which continue to dominate due to their lower price points and wide variety of options.
The increasing availability of 4G and 5G connectivity in these regions is also fueling the demand for smartphones. As internet access becomes more widespread, users are upgrading to newer devices that support these technologies, further driving the adoption of Android devices.
iOS: Modest Growth Amid Challenges
While Android is set to lead the market in 2024, Apple’s iOS platform is expected to experience a more modest growth rate of 0.4%. Despite Apple’s impressive performance in emerging markets like India, the company is facing challenges in some of its key markets, particularly in China, the US, and Europe. High-end iPhones have seen slower growth in these regions as consumers hold onto their devices for longer periods, delaying upgrades.
However, Apple’s strong brand loyalty and continuous innovation in product features could help it recover in the coming years. There are predictions that by 2025, iOS will outpace Android in terms of growth, with a projected increase of 3.1%, compared to 1.7% for Android.
Regional Market Dynamics
In emerging markets, the adoption of smartphones has been growing at a rapid pace, with a particularly strong demand for affordable, entry-level devices. In Asia-Pacific, Latin America, and Africa, the expansion of mobile networks and affordable data plans has led to an explosion in smartphone usage. Consumers in these regions are primarily opting for Android devices due to their affordability and the wide range of options available.
On the other hand, in developed markets like the US and Europe, smartphone growth has slowed down as most consumers already own devices, and the market is saturated. However, these markets still show a preference for premium iOS devices, especially iPhones, due to their high-quality build and ecosystem integration.
Foldable Phones: A Growing Niche with Innovation
The Rise of Foldable Smartphones
Foldable smartphones, though still considered a niche market, have sparked considerable interest due to their innovative form factor and technological advancements. Although the segment faced a 7.4% decline in Q3 2023, foldables are expected to recover and grow by 10.5% in 2024. This growth is largely driven by increased investments from Chinese vendors and a growing consumer interest in devices that combine the portability of smartphones with the functionality of larger screens.
Foldable devices continue to push the boundaries of what smartphones can do, offering users the flexibility of larger screens in a more compact form factor. While the segment remains niche, its potential for further growth is undeniable. Projections suggest that foldables will maintain a double-digit compound annual growth rate (CAGR) of 15.9% through 2028.
Challenges in the Foldable Market
Despite the promising outlook for foldable phones, the growth of this segment is showing signs of slowing down. Chinese manufacturers, who have been leading the foldable market, are increasingly shifting their focus and investments toward developing smartphones powered by generative AI (GenAI), which they believe will offer more substantial long-term growth prospects.
The cost of foldable devices also remains high, which limits their appeal to a broader consumer base. Until prices come down and the technology becomes more mainstream, foldable phones will likely remain a specialized product targeted at tech enthusiasts and early adopters.
The Role of Generative AI in Shaping Smartphone Trends
Generative AI: The Next Frontier in Smartphone Innovation
Generative AI (GenAI) is one of the most talked-about technologies in the smartphone industry, but its immediate impact on smartphone demand remains limited. Although the potential of GenAI to revolutionize user experiences is immense, the technology is still in its early stages of integration into smartphones. Currently, GenAI features are mostly found in premium flagship devices, with more affordable models expected to incorporate these capabilities in the coming years.
GenAI could bring significant advancements to smartphones by enhancing personalization, enabling more sophisticated virtual assistants, and improving features like camera performance, battery optimization, and app recommendations. However, consumer awareness and the development of compelling GenAI-driven features are critical to the technology’s success in driving substantial upgrades in the coming years.
The Long-Term Outlook for GenAI-Powered Smartphones
While GenAI is currently limited to the high-end flagship segment, it is expected to gradually filter down to more affordable smartphones as manufacturers integrate AI capabilities into their devices. By 2028, GenAI-enabled smartphones are projected to account for 70% of the market, signaling a shift in how smartphones will operate and interact with users.
The evolution of GenAI-powered smartphones will likely be gradual, with initial offerings being premium devices. However, as the technology matures and its benefits become more apparent, GenAI is expected to become a core component of both high-end and mid-range smartphones, transforming the way consumers use their devices.
Challenges in the Adoption of GenAI Smartphones
Despite its potential, the widespread adoption of GenAI smartphones is not without its challenges. Manufacturers will need to invest heavily in research and development to create compelling GenAI features that resonate with consumers. Additionally, educating the public about the benefits of GenAI and ensuring that it is integrated seamlessly into devices will be key to its success.
The ability of GenAI-powered smartphones to cater to a broader range of consumer needs—ranging from gaming and photography to productivity and entertainment—will play a crucial role in their adoption across different market segments.
Looking Ahead: The Future of the Smartphone Market
How Will Smartphone Growth Play Out in 2024 and Beyond?
The smartphone market in 2024 is poised for a positive recovery, with Android-powered devices leading the charge. The increasing affordability and adoption of smartphones in emerging markets, combined with innovations in foldable devices and the growing integration of GenAI, will continue to shape the future of the industry. However, challenges remain, particularly for Apple, which faces stiff competition in key markets and must address issues related to slowing growth in developed regions.
The next few years will likely witness continued innovation in smartphone technology, with advancements in artificial intelligence, foldable displays, and connectivity shaping the way consumers interact with their devices. As smartphone manufacturers continue to compete for market share, the race for innovation and user experience improvements will drive the industry forward.
FAQs
1. What is driving the growth of the smartphone market in 2024?
The smartphone market in 2024 is primarily driven by Android devices, particularly in emerging markets. Affordability, increased access to mobile networks, and pent-up demand for device upgrades are fueling this growth.
2. How is foldable phone adoption progressing?
Foldable phones remain a niche market but are expected to grow by 10.5% in 2024. The segment has faced some challenges but continues to show potential for long-term growth, driven by innovation and investments.
3. How will generative AI affect smartphone demand?
Generative AI (GenAI) is expected to revolutionize user experiences by enhancing features like personalization, virtual assistants, and camera performance. Initially, GenAI features will be available in premium devices but are expected to filter down to mid-range smartphones by 2028.
4. Which regions are seeing the most growth in smartphone adoption?
Emerging markets in regions such as Asia-Pacific, Latin America, Africa, and the Middle East are seeing the most significant growth in smartphone adoption, driven by affordable Android devices and expanding mobile networks.
5. What challenges is Apple facing in the smartphone market?
Apple is facing challenges in major markets like China, the US, and Europe, where growth has slowed due to market saturation and longer device upgrade cycles. However, Apple is expected to recover and outpace Android growth by 2025.
