GLOBAL SMARTPHONE SALES – ANNUALISED VOLUME Q4 2013 – Q2 2024
Smartphone sales highlight how major shifts are underway in consumer markets. Sales peaked as long ago as 2017 and show no sign of major recovery, as the chart confirms:
- The cost of living crisis means people are back to buying what they “need”, and cutting back on what they only “want”
- Today’s ageing populations mean there are fewer young people to make their “first purchase”
THE PREVIOUSLY PROFITABLE MIDDLE MARKET IS DISAPPEARING
Markets are polarising as the Boomer SuperCycle ends – the highly profitable Middle Market is disappearing
The combination of these changes means that most consumers are being more careful with their money. As a result, markets are polarising again, as the chart shows.
Of course, there will always be some wealthy people who can afford luxury items. But most people now focus on value.
CHINA’S SMARTPHONE MARKET HIGHLIGHTS THE TREND
Apple Falls Out of Top Five in China
Top smartphone-makers by market share on the Chinese mainland
Over in China, the world’s biggest smartphone market, the pressures are even more extreme as consumers cut back. As Canalys notes, there is a:
“Lack of justification for consumers to upgrade their smartphones. The report explained that consumers’ willingness to upgrade is low, given that hardware specification upgrades have not sparked the desire to pay.”
As Reuters reports, Apple was forced to offer $300 discounts during Q2, a 50% increase on its Q1 discounts. Even so, as the Caixin chart shows, Apple fell out of the Top 5 supplier list. As analyst IDC reports:
“We are seeing increasing competition amongst the leaders and a polarization of price bands…Many leading Chinese OEMs are increasing shipments in the low end in an attempt to capture volume share amidst weak demand. As a result, the share of mid-range devices is challenged”.
COMPANIES ARE RELYING ON AI FOR A SALES BOOST, BUT WILL LIKELY BE DISAPPOINTED
Apple’s latest results confirm this key issue. Its total iPhone sales still fell in the June quarter. This continues the trend of the past year, with its YTD sales also down. And this is despite the fact that it has been quietly focusing on the Value segment for some time:
- Of course, you can still pay $999 for a top of the range iPhone 15 family
- But Apple also offer older models at prices down to $429 for the SE model
- And it is also offering “carrier deals” and “trade-in” credits worth up to $1k
Like all tech companies, it is also hoping for an AI sales boost. But it seems unlikely consumers will pay up for a new iPhone just to get a better search experience.
THE USED SMARTPHONE MARKET IS SEEING MAJOR GROWTH
As the Visual Capitalist chart confirms, the best-selling iPhones of all time are actually the iPhone 6 series. In terms of later models, only the iPhone 11 comes close.
This highlights the fact that used smartphones have become the main area of market growth. IDC expects these to average 9% p.a. growth out to 2027. And Canalys notes that pricing continues to be extremely affordable. In Kenya, for example:
“The most popular refurbished smartphones are priced at around US$45, while nearly 80% of refurbished smartphones are priced below US$100“.