According to a report by Canalys, the global smartphone market experienced an 8 per cent year-on-year (YoY) growth in the fourth quarter (Q4) of 2023, reaching 319.5 million units, further indicating signs of stabilisation and recovery. Total shipments for the full year 2023 amounted to 1.14 billion units, marking a 4 per cent decline compared to 2022.
According to the report, Apple claimed the top position for the first time with a 20 per cent market share and 229.2 million shipments in 2023. Samsung followed closely, maintaining profitability as its strategy, shipping 225.4 million units, and capturing a 20 per cent market share. Xiaomi solidified its third position, holding a 13 per cent market share with shipments totaling 146.4 million units. Further, OPPO and TRANSSION ranked fourth and fifth, with 9 per cent and 8 per cent market shares, respectively.
Commenting on the report, Sanyam Chaurasia, senior analyst, Canalys, said, “The recovery in emerging markets led to a rebound in the second half (H2) of 2023, narrowing the decline. Benefiting from additional strategic focus and resources from vendors who launched a slew of mass-market models, Latin America, Africa and the Middle East showed strong recovery momentum from Q3 2023 onward. Meanwhile, as macroeconomic conditions improved in the Asia-Pacific (APAC) region, consumer demand significantly increased toward the end of the year. TRANSSION and Xiaomi have benefited from these strong mass-market rebounds, achieving remarkable YoY growth in Q4. However, mature markets, including Mainland China, Europe, and North America, still face strong headwinds due to subdued consumer spending and reduced channel investments. In 2024, emerging markets will remain a strategic battleground for most smartphone vendors seeking growth.”
Meanwhile, Toby Zhu, senior analyst, Canalys, said, “Smartphone vendors witnessed a significant profitability improvement despite the market declining in 2023. Vendors have been cautious with their business operations by streamlining expenses and focusing on their key markets in response to the market downturn. Meanwhile, the overall inventory backlog was largely reduced in H1 2023, elevating the operating pressures for vendors to clear inventory. Lastly, components and chipset prices were relatively low over the past year, allowing vendors to increase profit margins and develop competitive products. Vendors feel more confident financially in capturing any nascent demand and supporting more flexible incentive measures.”
Further, Zhu added, “Investing in on-device artificial intelligence (AI) for the high-end segment and expanding shipments in mid-to-low-end segments will become two strategic directions for smartphone vendors in 2024. AI will span from product level differentiation to operational and corporate strategy, varying across companies. Samsung will incorporate generative AI in its long-term product strategy. At the same time, Chinese vendors such as Xiaomi, vivo, OPPO and HONOR have already released flagship devices with gen AI capabilities in their home markets. On the other hand, vendors will continue to focus on increasing volume and scales to maintain their wallet share and priority level in retail channels and supply chains even in the volatile environment. The mass-market segment will be the center for vendors, while value-for-money proposition and affordability are core product strategies in the short term.”
