According to the latest data released by IDC, although the overall smartphone market has rebounded sharply in 2024, Apple's iPhone shipment growth has been relatively flat, achieving a slight increase of only 0.4%. This growth comes on the back of a 6.2% increase in overall shipments in the global smartphone market, which reached 1.24 billion units. In contrast, Apple's market performance seems to be slightly weak, especially in a highly competitive market environment.
Apple's challenge
The slowdown in iPhone growth can be attributed to a number of factors, most notably the fierce competition in the Chinese market. In China, Apple is not only under pressure to innovate in technology, but also has to deal with growing legal challenges. Competitors such as Huawei, OPPO and Xiaomi, for example, are eating into Apple's market share with more aggressive pricing strategies and technological innovations. Huawei and Xiaomi have ramped up their investments in new hardware, new software and custom chips in recent years, which has complicated Apple's market outlook in the region. Recent reports also point out that Xiaomi plans to develop its 3nm custom chips, which means that Apple will face more challenges from local Chinese manufacturers in the future competition.
Huawei's challenges are particularly prominent. The company's launch of the Mate 70 phone with its own processor and HarmonyOS reduces its reliance on Google services while also expanding its smartphone business to more markets, which is expected to boost sales even more. This strategy of Huawei, especially if it does not rely on Google's ecosystem, could put a lot of pressure on Apple.
The relationship between generative AI and the market
While generative AI is becoming a hot topic in the smartphone industry, AI capabilities have not had a significant impact on overall smartphone shipments so far. IDC data shows that despite the boom in the industry caused by AI capabilities, the growth of smartphone shipments has not accelerated significantly. This also means that although new devices like the iPhone 16 have added features such as Apple Intelligence, the adoption of these features has not led to the expected user growth.
In addition, Apple has yet to release the iOS 18.2 update, which will introduce ChatGPT support for features such as Siri, Image Playground, and Genmoji. The rollout of these features may impact the user experience in the future, but it remains to be seen how the public reacts to these new additions and whether they will have a real impact in the market.
Figure: Apple's sales are slowing down (Source: Wccftech)
Strategy for the high-end market
Despite the slower growth of the iPhone in the global market, Apple still holds the leading position in the industry's profits. Apple's high-price strategy has helped it maintain a solid revenue stream in the smartphone industry. Even without significant growth in overall shipments, Apple will still be able to attract a large number of high-income consumers by virtue of its high-end market advantages, thereby consolidating its financial performance in the global market. The IDC research report expects iPhone shipments to improve in 2025, with a projected growth rate of 3.1%, compared to a 1.7% growth rate for Android devices.
Strong growth of Android devices
Compared to Apple, the growth momentum of Android smartphones is even more pronounced, especially in emerging markets such as Asia Pacific, the Middle East and Africa. Android device manufacturers, especially those in China and India, have managed to launch a large number of low-to-mid-range devices at more competitive prices, which provide more options in regions with lower smartphone penetration, further driving the growth of the overall market.
The growth in the smartphone market was mainly driven by the sales of these emerging markets and low-end devices, and Android manufacturers were able to enter these markets at attractive prices, thereby driving the growth of the overall smartphone market by 7.6%. In contrast, Apple's strategy is more focused on the premium segment, resulting in a more conservative performance in these fast-growing markets.
Future outlook
Apple needs to continue to focus on its competitors' technological innovations and go-to-market strategies, especially in key markets such as China. Breakthroughs in areas such as generative AI, custom chips, and OS localization will be key to Apple's ability to stay ahead of the curve in the future.
Overall, Apple still occupies the high profit range of the global smartphone market, but how it responds to fierce market competition, especially in China and other emerging markets, will be a key factor affecting its future performance.
