Global Smartphone Market Rebounds, But AI-Driven 'Supercycle' Fails to Materialize

Turns out, the AI upgrade 'supercycle' isn't happening with iPhone or Android - 9to5Mac

AI was supposed to lead to a supercycle of smartphone growth, not just among iPhone users but also Android. But it turns out, that's simply not a thing yet -- at least based on global 2024 smartphone trends. Sales are trending up, but not at all for the reasons you might expect. This week the IDC (International Data Corporation) released its forecast for global smartphone shipments in 2024. Overall, total smartphone shipments are expected to grow 6.2% following a couple years of declines. Why the positive trend? Are AI or foldables responsible? It turns out, no, not really. While GenAI continues to be a hot topic and top priority for many vendors, it is yet to impact demand significantly and drive early upgrades. Similarly with foldables, IDC notes that they "continue to grab headlines despite the low volumes in the market." And in Q3, "foldables declined by 7.4%, even as most of the world's prominent vendors launched new models." So what's the main driver behind smartphones' 2024 success? "Low end devices." Rapid Android growth of 7.6% year-over-year focused in APeJC, Latin America, Middle East and Africa and China, primarily in low end devices, is pivotal to the 6.2% growth this year. That's right. Big tech advancements in generative AI and unique designs like foldables are not behind the 2024 smartphone rebound. Instead, it's simply overdue upgrades and low end devices providing a much-needed market boost. Could 2025 change that? Sure. IDC says it still expects AI and foldables to lead to growth at the higher end over the coming years. But for now at least, there's no sign yet of a big supercycle of upgrades thanks to AI. What do you make of 2024's smartphone trends? Is an iPhone supercycle coming? Let us know in the comments.

Apple is nowhere to be found in this year's smartphone sales rebound, researchers say

Although global smartphone sales are set to grow to 1.24 billion units this year, Apple's (AAPL+0.91%) performance has barely improved, according to a new study. Apple and its rivals are expected to ship 6.2% more phones in 2024, according to market intelligence firm IDC. But Apple's iPhone sales are set to grow by just 0.4%, a minor increase compared to its competitors. The good news for Apple is that the tech giant is still the industry's profit leader. Apple sells each of its smartphones for about $1,000, while Android rivals collectively sell their phones for about $295, according to the IDC. In October, $46.22 billion of Apple's overall $94.9 billion in revenue came from iPhone sales, which marked a 6% year-over-year increase. The IDC said that much of this year's growth came from pent up demand and regions where smartphones haven't greatly penetrated the market. While Apple is expected to have a better performance in 2025, more affordable devices from Android sellers helped Chinese brands boost their sales. Read more: The 'consumer AI revolution' will be powered by Big Tech's most familiar products Plus, despite new investments in artificial intelligence by companies like Apple, Google, and Samsung, customers aren't really interested -- not yet. "While GenAI continues to be a hot topic and top priority for many vendors, it is yet to impact demand significantly and drive early upgrades," IDC senior researcher Nabila Popal said in a statement. Popal added that generative AI will "revolutionize the user experience," noting that more investments are needed to make consumers more aware and interested in such features in order to boost demand and create the "super cycle" the industry is looking for. By 2028, the IDC thinks smartphones using generative AI will grow to 70% of the overall smartphone market. That somewhat lines up with what Jefferies (JEF-0.05%) analysts warned earlier this month. In a note following Apple's third-quarter earnings report, Jefferies warned that the iPhone's sales momentum was likely due to an earlier launch of the iPhone 16 compared to the iPhone 15, noting that AI features likely won't impact sales for a while. Apple officially rolled out its new artificial intelligence features, known as Apple Intelligence, for users with the iPhone 15 Pro or iPhone 16 in October. CEO Tim Cook said Apple Intelligence "marks the beginning of a new chapter" for the company's innovation and that new features, including ChatGPT integration, would begin rolling out in December, with more to come in the future. That staggered approach will likely start creating a payoff in 2026 or 2027, the Jefferies analysts said at the time, warning that "current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high."

Apple fails to ride global 2024 smartphone boom with Apple Intelligence

Despite the launch of Apple Intelligence, Apple has not seen the same growth in the recovering smartphone market as other players -- but that's expected to change in 2025. Throughout 2024, reports of smartphone shipments worldwide have tended to say that iPhone sales are down because of increased competition from Chinese rivals. Now two reports back that up, with the first also saying that Apple has failed to benefit from strong growth that has helped other vendors. According to IDC, after two years of steeply declining smartphone sales, 2024 is now predicted to show a growth of 6.2% year over year. Yet the 2024 prediction for iPhones is a growth of just 0.4%. IDC notes that Apple has had record-breaking performance in India, but that it has faced challenges in the US, Europe and especially China. Separately, Reuters has a report about sales in China that illustrates how strong the local market is there. It says that overall, sales of non-Chinese smartphones fell 44.25% year over year in October 2024, according to government sponsored research. That research from the China Academy of Information and Communications Technology (CAICT) does not break down details, but does say Apple is the largest foreign manufacturer in the market. CAICT does also back up the claim that the smartphone market is growing again after years of decline. Overall phone sales rose 1.8% year over year to. 29.67 million units in October. Significantly, Apple Intelligence is not yet available in China -- and has only slowly been rolling out in the US since the launch of the iPhone 16 range. Over the period of the research, then, Apple Intelligence has been more hype than anything else, but the hype has not sold iPhones. "While we continue to believe GenAI [Generative AI such as Apple Intelligence] will revolutionize the user experience in the years to come," said IDC's Nabila Popa, "more investments are needed to increase consumer awareness and introduce a 'must have' feature that will rush consumers to the store and create that super cycle which everyone is waiting for." "For now, we expect GenAI smartphones will take their place in premium flagship devices," continued IDC, "and keep moving down in price tiers to rapidly grow to 70% of the smartphone market by 2028." This expectation is why IDC believes Apple's fortunes will turn around in 2025. For 2024 when its iPhone grew 0.4%, Android rose 7.6% -- but "the tides will turn as iOS is expected to grow." IDC believes that for 2025, the iPhone will see a 3.1% rise year over year. At the same time, it predicts that Android's growth will be no more than 1.7%. At present, though, there is no date for when Apple Intelligence will come to China. However, Tim Cook has been in China to discuss partnerships with local firms in order to comply with the country's regulations before launching the feature.

Apple Faces Modest Growth As IDC Forecasts Smartphone Market Rebound - Apple (NASDAQ:AAPL)

Global smartphone shipments will likely rise by 6.2% year-over-year in 2024, reaching 1.24 billion units, per International Data Corporation research. The growth comes after two consecutive years of declines, driven by pent-up demand for device upgrades. However, IDC expects a deceleration to low single-digit growth from 2025 onward, with a compound annual growth rate (CAGR) of 2.6% from 2023 to 2028. Also Read: Apple iPhone 16 Sees 20% Sales Surge in China, But AI Absence Prompts Early Price Cuts While generative AI (GenAI) is a crucial focus for many smartphone vendors, its immediate impact on demand still needs to be improved, according to Nabila Popal, IDC's senior research director. Popal noted that although GenAI is poised to transform user experiences in the coming years, greater consumer awareness and compelling features are required to create the anticipated "super cycle" of upgrades. By 2028, IDC expects GenAI-enabled devices to account for 70% of the smartphone market, driven by price reductions and widespread adoption. Android smartphones are forecasted to grow 7.6% year-over-year in 2024, particularly in regions like Asia-Pacific, excluding Japan and China (APeJC), Latin America, and Africa. These gains are attributed to low-end devices catering to emerging markets. Meanwhile, Apple Inc's AAPL iOS devices are projected to see modest growth of 0.4% due to challenges in major markets like China, the U.S., and Europe, despite solid performance in India. In 2025, iOS growth will likely accelerate to 3.1%, surpassing Android's forecasted 1.7% growth. Foldable smartphone shipments declined by 7.4% in the third quarter of 2024, even as prominent vendors introduced new models. Nevertheless, foldable will likely grow 10.5% in 2024, maintaining a five-year CAGR of 15.9% through 2028. Challenges such as durability concerns and limited unique use cases continue to dampen their momentum, according to Anthony Scarsella, IDC's research director. Many Chinese manufacturers are now shifting focus toward GenAI-enabled devices. IDC highlights that the expanding used smartphone market, increasing penetration, and lengthening refresh cycles will contribute to slower growth after 2024. Apple posted fiscal fourth-quarter revenue of $94.9 billion, exceeding analyst expectations of $94.56 billion. Adjusted earnings reached $1.64 per share, beating forecasts of $1.60. The stock surged 27% year-to-date. Analysts remain divided on Apple's prospects, with ratings ranging from Buy to Underweight, highlighting uncertainty over future growth. Bank of America cites conservative guidance but sees potential in Apple Intelligence boosting iPhone cycles and product demand. Goldman Sachs praises strong iPhone performance offsetting Services weakness, projecting growth with iPhone 16 and Apple Intelligence. Wedbush emphasizes vital iPhone upgrades and AI-driven cycles, calling the September quarter "better than feared." Apple is reportedly adopting a new strategy for software updates, opting for staggered feature rollouts rather than bundling them into a single annual iOS release. In his latest "Power On" newsletter, Bloomberg's Mark Gurman revealed Apple's plan for a major update with iOS 18.4, which is expected this spring. However, some features initially planned for the latter half of 2025 have been postponed. Gurman also noted delays in the much-anticipated Siri overhaul, which will integrate Apple's in-house large language models (LLMs) for a more conversational assistant. According to Gurman, an unusually high number of features for iOS 19 are deferred until spring 2026, aligning with the release of iOS 19.4. Price Action: AAPL stock closed higher by 0.94% at $235.06 on Tuesday. Also Read: Apple iPhone 16 Discounts Roll Out on Alibaba's Tmall, AI Delays, and Domestic Competitors Fuel Aggressive Pricing Image Credit - Shutterstock. This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Apple Loses to Android as Smartphone Market Recovers | PYMNTS.com

New research shows the smartphone market recovering in 2024 following two years of sharp declines. However, Apple's iPhone played just a small part in that recovery compared to rival Android phones, data released Tuesday (Nov. 26) by IDC shows. Global smartphone shipments for the year are projected to increase 6.2% to 1.24 billion units, IDC's Worldwide Quarterly Mobile Phone Tracker shows. It's a trend driven by "pent-up demand for device upgrades," the research group said in a news release. And while this year marked a robust recovery for the smartphone space, IDC expects growth to slow to single digits from next year and beyond, due to increasing smartphone penetration, longer refresh cycles, and a fast-growing market for used phones. "While GenAI continues to be a hot topic and top priority for many vendors, it is yet to impact demand significantly and drive early upgrades," said Nabila Popal, senior research director with IDC's Worldwide Quarterly Mobile Phone Tracker. "While we continue to believe GenAI will revolutionize the user experience in the years to come, more investments are needed to increase consumer awareness and introduce a 'must have' feature that will rush consumers to the store and create that super cycle which everyone is waiting for." For now, added Popal, IDC anticipates that smartphones using generative artificial intelligence (GenAI) will "take their place in premium flagship devices" and become 70% of the smartphone market by 2028. According to the report, Android phones saw rapid growth of 7.6% this year in Asia (excluding Japan and China), Latin America, the Middle East and Africa, especially in lower-end devices. This growth was crucial to the overall 6.2% increase. By comparison, Apple's iOS phones are expected to climb just 0.4% for the year. "Despite record breaking performance in emerging markets like India, Apple faces challenges in large markets like China, US and Europe," the report said. "Looking ahead to 2025, the tides will turn as iOS is expected to grow by 3.1% year-over-year, outpacing Android's forecasted 1.7% growth over the same period." PYMNTS examined the race among smartphone makers to entice consumers using AI earlier this month. "One good thing about AI-powered apps is their ability to create personalized experiences," Dmytro Tymoshenko, the CEO of Noiz, which creates AI-powered summaries of YouTube videos, told PYMNTS. "AI is able to analyze data at a very high speed, which allows it to, for instance, recommend content based on user preferences quite fast."