The Chinese smartphone market is expected to see low single-digit year-over-year growth in 2024.

Recently, research institution Counterpoint released data for the first quarter of the 2024 Chinese smartphone market, showing a year-over-year increase of 1.5% in sales volume and a sequential increase of 4.6%, marking the second consecutive quarter of positive year-over-year growth. The top six manufacturers are in fierce competition, with market shares ranging from 14.6% to 17.4%, with only about a 3 percentage point difference between the first and sixth place.

In the first quarter, vivo secured the top spot in the Chinese smartphone market with a 17.4% share, driven by strong sales of the Y35 Plus and Y36 in the entry-level market and the S18 in the mid-range market; Honor ranked second with a 16.1% market share, with a year-over-year increase in sales of 11.5%; Apple ranked third with a 15.7% market share, experiencing a year-over-year decline in sales of 19.1%.

According to the institution's statistics, Huawei achieved a year-over-year increase of 69.7% in market share in the first quarter, ranking fourth, with its market share rising to 15.5%, mainly due to the strong sales of the Mate 60 series, in addition to the brand's popularity among consumers; OPPO ranked fifth with a market share of 15.3%; Xiaomi fell to sixth place, but its market share increased to 14.6%.

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Counterpoint analysts stated that with the continuous growth in smartphone sales in China and a sequential increase of 4.6%, the momentum of recovery seems to be building. Sales promotion activities during the Chinese New Year period were the main factor driving the growth momentum. According to Counterpoint's weekly smartphone sales tracker in China, the average weekly sales volume in the four weeks before the Chinese New Year increased by 20% compared to a normal week.

Looking ahead, the institution expects iPhone sales to recover, and for the second quarter, the iPhone may introduce new color options, which, combined with aggressive sales plans, could bring the brand back to positive growth. At the same time, the industry is looking forward to Apple showcasing its progress in artificial intelligence capabilities at the WWDC in June.The agency anticipates that the Chinese smartphone market will experience a low single-digit year-over-year growth. The emergence of generative artificial intelligence (AI) has prompted Chinese mobile phone manufacturers to integrate such features into their flagship devices. It is expected that smartphone brand manufacturers will continue to explore new AI applications and further permeate these AI applications into the mid-range market.

What will be the development trend of smartphones in the next two years?

According to data from Mordor Intelligence, the smartphone market size is projected to be 1.51 billion units by 2024 and is expected to reach 1.85 billion units by 2029, with a compound annual growth rate (CAGR) of 4.10% during the forecast period (2024-2029).

Factors such as the increase in disposable income, the development of telecommunications infrastructure, the emergence of budget-centric smartphones, and an increasing number of product launches have contributed to the growth of the smartphone market in Asian countries.

The smartphone industry has been steadily growing, with an expanding market size and variety of models. By 2021, 40% of the global population owned smartphones. According to Ericsson, the number of global smartphone users exceeds 6 billion, with an anticipated growth of several hundred million in the coming years. China, India, and the United States are the countries with the highest number of smartphone users.

The Consumer Technology Association (CTA) conducts consumer technology sales and forecasting research that also focuses on new technology trends, anticipating that 5G phones will generate $61.37 billion in revenue, a 15% increase from the $53.38 billion in 2021. It is expected that 5G phones will account for 62% of all smartphone sales in 2021, rising to 72% in 2022.

Major players in the market are involved in strategic partnerships to improve their services and maintain competitiveness. In October 2022, Samsung Electronics announced an expanded agreement with Google to advance the interoperability of smart homes. Users of Samsung Galaxy phones and tablets will be able to quickly add Matter-compatible products to the SmartThings and Google Home ecosystems.

Consumer interest in 5G devices is growing. Consequently, chip manufacturers are pushing manufacturers to incorporate 5G chips into their new smartphone product lines.

The main suppliers in the market are also focusing on the development and expansion of networks.

Due to various factors such as reduced product costs, improvements in phone design and functionality, the expansion of global mobile email and browsing services, the emergence of 4G and 5G network technologies, and increased competition among mobile carriers, smartphones are currently experiencing rapid growth, as well as standardization and upgrades of operating systems.Trends in the Smartphone Market

The Android operating system is expected to see significant growth.

According to a report released by StatCounter in January 2022, Android remains the most popular mobile operating system worldwide, with a market share approaching 70%, while iOS accounts for about 25% of the market.

Furthermore, many app developers prefer to develop gaming/entertainment apps, social media apps, mobile utility apps, and lifestyle apps using the Android operating system because it requires developers to be knowledgeable in languages such as C++, Kotlin, and Java. Additionally, Google offers various development tools, such as Android Jetpack, Firebase, and Android SDK, to assist developers in building user-intuitive interfaces.

The platform allows users to download apps for free. However, these apps are designed to offer in-app purchases and in-app course subscriptions, which generate more revenue in the Google Play Store than in the Apple Store.

The increasing demand for integrated Internet of Things (IoT) applications, such as energy management and smart home products, for high-speed data connections is expected to drive the adoption of 5G smartphones.

It is anticipated that the Asia-Pacific region will hold a significant market share.The Asia-Pacific region is one of the key markets for smartphones, largely due to the highly developed telecommunications industry and a vast customer base. Additionally, the region is increasing its investment in mobile networks. Countries such as India, Japan, Australia, Singapore, and South Korea are increasingly investing in the development of their domestic telecommunications markets, which is expected to further boost the market in the region.

The demand for entry-level smartphones is expected to be driven by the growing needs in developing countries within the region, such as India and Indonesia, as local governments promote digitalization and smartphones increasingly penetrate rural areas. For instance, the Digital India initiative is a flagship program of the Indian government, primarily aimed at transforming the nation into a digitally empowered society.

Furthermore, India has also introduced the Production Linked Incentive (PLI) scheme, which offers incentives of 6-4% on incremental sales of manufactured mobile phones for the years 2019-2020, for a period of five years. High-end multinational mobile phone manufacturers, or those producing phones valued at over $200, must have sold goods worth $4.9 million in the previous financial year to be eligible for the reward. Such government initiatives are expected to give a boost to the country's smartphone market.

Key suppliers in the smartphone market are focusing on improving their product offerings and launching new products in the region.

The growth of urban populations, increased consumer awareness of mobile device usage, the surge in AR technology, and the expansion of OTT platform subscriptions are expected to drive market expansion in the coming years.

In Mainland China, the continuous rise in smartphone penetration and the proliferation of 4G have led to a surge in mobile internet usage, thereby supporting the country's move up the value chain towards a digital society. Over 990 million people use mobile internet services, with projections estimating an increase of 200 million users by 2025.