Smartphone Market

Global Smartphone Market Size (2024 to 2032)

The global smartphone market was worth USD 461.47 billion in 2023. The global market size is expected to reach USD 493.08 billion in 2024 and anticipated to reach USD 837.75 billion by 2032, growing at a CAGR of 6.85% from 2024 to 2032.

Smartphones, with robust hardware capabilities, extended mobile operating systems, facilitating broader software applications, the Internet, and multimedia functions (music, videos, and games), as well as basic phone functions such as voice calls and text messages, are included in the scope. Smartphones used for industrial purposes or rugged phones are not included in the scope. With more than 50% penetration across all regions, the replacement cycle is expanding, leading to lower unit sales, especially in areas like the United States and China, among others. However, 5G phones and foldable phones are likely to present them with new opportunities. According to Ericsson, the number of 5G mobile subscriptions in North America will reach 325 million compared to 3 million in 2019.

Current Scenario of the Global Smartphone Market

 The smartphone market continues to grow with increased shipments and a steady easing of the inflation rate worldwide. According to the International Data Corporation (IDC) 2024 release, in 2024, the second quarter witnessed smartphone shipments globally surged 6.5 per cent every year to reach 285.4 million units. Despite the achievement of being the fourth straightforward quarter of shipping or consignment rise and making the push or trend towards the anticipated return in 2024. However, the market remains on a challenging course in several regions and is yet to experience full-fledged demand. Currently, the North American and European markets saw an increase in shipments i.e. 8 per cent and 10 per cent, respectively and Asia Pacific remains the most attractive industry.

MARKET DRIVERS

The growing internet penetration, increasing promotional activities and rising number of subscriptions in social media are driving the global smartphone market.

The rapid growth in e-commerce and m-commerce in the working population is boosting the smartphone market growth. One of the primary factors propelling the rise is the increasing use of AI in smartphones. Important developments like the rise in online sales will also have an impact on the market over the forecast period. Technological advancements are further fuelling the growth rate of the global smartphone market. Technological advancements include increased processing power and capabilities, improved operating systems and user interfaces, 5G connectivity, and others. The improved processing power, high-resolution displays, and sophisticated cameras of modern smartphones extend beyond the capabilities of earlier versions, which makes them even more attractive.

Social and cultural factors are boosting the global smartphone market growth.

Smartphones are increasingly viewed as social symbols, communication tools, and constant demand for upgrades, providing access to social media, news, streaming services, and entertainment options. Affordable smartphones offer democratized access to a wide range of models, attracting consumers of all income levels, thanks to increased manufacturer competition and innovation. The rapid adoption of artificial intelligence in smartphones will offer immense growth opportunities. However, the growing cycle of smartphone replacement will challenge the growth of market players. To take full advantage of opportunities, market participants must focus more on growth prospects in fast-growing segments while maintaining their positions in slow-growing segments.

Smartphones are becoming an important part of retail sales as they become more and more part of consumers' lives. E-commerce websites like Amazon are attracting users with various deals and discounts on smartphones, which improved the culture of online shopping.

Online smartphone sales have also been boosted by the holiday shopping culture in all regions. However, in regions like India where smartphone sales do not appear to be declining, smartphone companies such as Xiaomi, Samsung, Vivo and Oppo are aggressively expanding their offline stores in the Indian smartphone market to take advantage of the market opportunity. Furthermore, participation could be lost to other categories such as fashion and consumer goods, home products, among others, in regions with high penetration of smartphones. This considers the growing share of e-commerce and the changing attitude of consumers towards online shopping.

Smartphones are the most common electronic devices nowadays because of a change in people's lifestyles where having a smartphone has become a norm. The increase in disposable income increases the likelihood that consumers will spend on mobile media, entertainment, networks and communications, leading to increased sales potential for consumer electronics such as smartphones, tablets, laptops and game consoles. The cases of smartphone adoption are very high among the urban population compared to the rural population and therefore there is a high demand for smartphones in developed regions (where the proportion of urban and rural population is higher than in developing regions).

MARKET RESTRAINTS

Market saturation is one of the issues currently hampering the global smartphone market growth. More than 80% of people in developed markets own a smartphone; therefore, there is not much scope for big growth. Upgrade purchases and replacement cycles have more growth potential in these countries. Growing e-waste and sustainability concerns are a big problem for the companies in the market. The increasing e-waste from abandoned smartphones presents significant environmental challenges that require manufacturers to focus on sustainable design, recycling initiatives and extended device lifespans. A study by the University of Pennsylvania found that using social media makes people feel more depressed and alone. On the other hand, moderate social media use significantly lowers feelings of loneliness and sadness.

MARKET OPPORTUNITIES

Self-healing smartphone displays will further expand the global smartphone market and so will the key players in the industry. It is expected that smartphone makers will start manufacturing self-healing displays within five years. This will function by applying a nano-coating to the display's surface and when scratched it produces a new substance that combines with air to fill in the flaw.  Sustainable practices in smartphone manufacturing are another factor that will move the market forward. Recycled materials, energy efficiency, eco-friendly packaging, etc. are gaining traction among companies and will completely change the market dynamics. Security is one area where prospects are enormous since cyber attackers are evolving their methods and channels. Furthermore, with the help of smartphone apps, wearable technology which includes body sensors, jewelry and smartwatches is expanding quickly and improving user interaction.

MARKET CHALLENGES

Mobile security is the biggest challenge in front of the global smartphone market. 62% of businesses compromise mobile security for speed and 54% of companies believe that mobile devices are less safe than traditional endpoints. Likewise, more than 24,000 bogus mobile apps are blocked daily. Threats to application security pose a serious risk to mobile users. Two-thirds of the compromised organizations said that the cyber breach was caused by an unauthorized or rogue application. Once installed on a device, malicious apps may cause havoc and are frequently overlooked. Furthermore, phishing, or social engineering, end-to-end encryption gaps, IoT devices, jailbreaking and rooting, spyware and network spoofing are some of the techniques used by threat actors to infiltrate, steal data or blackmail the user.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Smartphone Market Analysis By Operating System

The Android segment dominated the global smartphone market, accounting for 65% of the global market share in 2023 and will further propel during the forecast period. The main reason behind the large market share of iOS is that it is more reasonably priced. People in several nations with larger populations have substantially less spending power. Cost is, therefore, the primary consideration when choosing a phone. Apple cannot compete with Google in that field. Furthermore, the largest contributor to its dominance in the worldwide market is Asia with over 320 million people living in terrible poverty.

Global Smartphone Market Analysis By Distribution Channel

The e-commerce segment led the market in 2023 and is expected to be the largest segment in the global market during the forecast period. Several companies have developed smartphone applications that provide users an intuitive interface and features to make shopping, comparing products, reading reviews and completing transactions on mobile devices easier. The growing trend of consumers shopping on mobile devices emphasizes how important it is for merchants and e-commerce companies to provide intuitive and well-designed mobile websites and applications. M-commerce has the power to transform buying behavior and grow into a significant channel for sales. In the next five years, it is projected that mobile will rapidly overtake other channels as the preferred means of online shopping for customers, who are currently more dependent on digital gadgets.

REGIONAL ANALYSIS

North America holds the biggest share of the global smartphone market. Apple has a competitive advantage in the US market thanks to its cost spreading, branding and cultural influence. The U.S. and Canada have over 85% of smartphones, therefore the market is growing more slowly and concentrating on upgrades and replacement cycles. Approximately 280 million users make up the nearly saturated US market, but Canada has some room to grow. However, In Q3 of 2023, US smartphone shipments fell year over year for the fourth consecutive quarter due to a fall in consumer demand. Weak smartphone shipments were mostly caused by low carrier upgrade rates, which suggests that customers are choosing to keep their smartphones longer.

The European smartphone market is expected to propel further with a significant share in the coming years. The market in the region is complex and is exhibiting a balance between steady expansion, growing market saturation and changing customer tastes. Germany is dominating overall with over 75 million smartphone users and with more than 450 million users is leading the market. However, shipments of smartphones from Europe decreased by around 6 percent annually to 32 million in the third quarter of 2023. Even though Q3 2023 saw an annual fall for the tenth time in a row, there are indications that demand will rise in the future. Furthermore, Apple and Samsung were majorly impacted by the difficult demand in this quarter even after new product introductions.

Asia Pacific will grow at a faster growth rate during the forecast period. The expansion can be attributed to various factors like rising disposable income, expanding telecom infrastructure, the advent of budget-friendly mobiles and a growing number of product launches. It has a substantial consumer base and is one of the major markets mainly because of the rapidly expanding telecom industry. Additionally, the area is making increasing investments in wireless networks. India, Japan, Australia, Singapore and South Korea are predicted to propel the regional market as they are investing more in growing their domestic telecom sectors. China has been a preferred area for several technology companies. Leading supplier Huawei Technologies Co., Ltd., shipped 55.8 million units in the second quarter of 2020 and overtook Samsung, which shipped 54.3 million units in the second quarter of 2020 despite government sanctions. Entering its second year in the United States of America, Huawei can curb the impacts on its international business to compete with Samsung to obtain the top spot in the world.

The Middle East and African global smartphone market is anticipated to grow at an exponential pace in the future. The region offers a compelling image of disparities and swift development. The region has ample growth opportunities but also has challenges and different dynamics due to its wide range of geographical locations. It saw 12 million smartphone shipments which is more than 20 percent year over year and triple Q3 2223. The factor driving this consistent demand is that companies reported growth in their clientele and employment prospects. The non-oil sector continued to contribute significantly even while oil prices were declining.

Latin America is estimated to grow at a steady pace during the forecast period. A rising smartphone purchases due to the growing middle class and increasing disposable income in urban regions. People are spending more on consumer goods such as smartphones as a result of their growing wealth which is driving market expansion.

KEY PLAYERS IN THE GLOBAL SMARTPHONE MARKET

Companies playing a major role in the global smartphone market include Samsung Electronics Co. Ltd., Apple Inc., Huawei Technologies Co. Ltd., Lenovo Group Limited, LG Electronics Inc., TCL Communication Technology Holdings Limited, ZTE Corporation and Vivo Communication Technology. Co. Ltd.

RECENT HAPPENINGS IN THE MARKET

• In January 2024, Samsung Electronics Co. Ltd. will launch its new Galaxy S24 series with AI. Its best model can zoom at 4K in 60 frames per second and record in 4K at 120 frames per second. A section of a Brazilian retailer has already been dedicated to promoting the anticipated Galaxy S24 Ultra. Additionally, Walmart in the United States already carries the Galaxy S24+.

• In June 2023, Vivo’s latest smartphone X90S will be introduced with a dimensity 9200 chipset and 12GB RAM. Also, Chinese users received a new OriginOS 3 update for the Vivo X90 that offers better camera performance.

DETAILED SEGMENTATION OF THE GLOBAL SMARTPHONE MARKET INCLUDED IN THIS REPORT

This research report on the global smartphone market has been segmented and sub-segmented based on the operating system, distribution channel and region.

By Operating System

• Android
• iOS
• Others

By Distribution Channel

• OEM
• Retail
• E-Commerce

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa