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After several years of sluggishness, the smartphone industry finally returned to the growth track in 2024.

(Image source: Canalys)

According to the latest report released by market research firm Canalys, global smartphone shipments reached 288.9 million units in the second quarter of 2024, a year-on-year increase of 12%. The smartphone industry's three consecutive quarters of growth can be regarded as a relief for mobile phone manufacturers. The transition from a declining trend to a growing trend means a lot.

For example, the market has greater growth to accommodate niche categories, and segments such as foldable screens will have more promising prospects; for example, manufacturers can finally stop the meaningless "involution" and invest more energy and resources in technology research and development in addition to price.

Combined with the current social and technological environment, the return of the global smartphone market to growth seems to indicate that the "AI phone" track is correct, and the role played by Chinese mobile phone manufacturers in this process cannot be ignored.

More opportunities, more variables

Judging from the market share, Samsung is still the undisputed big brother. Although it has always been "Others" in the domestic market, Samsung's brand appeal is still top-notch from a global perspective, which is its basic base; however, its 18% market share has dropped by 3% compared with last year, and its advantage has been further narrowed, which shows that Samsung still cannot be taken lightly; Apple ranks second with a market share of 16%, and Xiaomi also bites Apple with a market share of 15%, ranking third; vivo and Transsion are ranked fourth and fifth respectively.

(Image source: Omdia)

What surprised Xiao Lei was that OPPO actually fell out of the top five and became "Others", while another domestic mobile phone brand Transsion relied on its achievements in Africa to become the fifth in the world. In addition, Honor and Huawei have already withdrawn many products with extremely high product power in 2024. Perhaps in the second half of this year, this ranking list will have to change again.

Looking at the products specifically, let’s first look at Samsung. According to the latest list of the world’s best-selling smartphones in the second quarter of 2024 released by Counterpoint, Samsung occupies five seats with Galaxy A15 5G (fourth), Galaxy A15 4G (fifth), Galaxy A55 (seventh), Galaxy S24 Ultra (ninth) and Galaxy A05 (tenth).

There is nothing much to say about Samsung's achievements. As the big brother, it can still achieve the world's first data without any achievements in the Chinese market, which shows the market's recognition of Samsung. It can be said that overseas users choose Samsung not because of its strong product strength or high cost performance, but simply because they trust Samsung. In other words, the brand influence is enough. Choosing Samsung may not be the best, but it will definitely not be wrong.

Apple, which ranked second, took the first, second, third and sixth places on the list with four models: iPhone 15, iPhone 15 Pro Max, iPhone 15 Pro and iPhone 14.

(Image source: Counterpoint)

Combining these two lists, it is not difficult to find that all manufacturers except Apple rely on low-end mobile phones to increase sales. Samsung's A series, Xiaomi's Redmi series and vivo's Y series are the real sales mainstays of manufacturers.

Apple's success is also difficult for Xiao Lei to understand. Obviously, the iPhone 15 series was criticized when it was launched last year, but it is obvious that everyone is "buying while criticizing", which does not affect Apple's sales at all. This shows that Apple's brand loyalty is indeed amazing, but we cannot ignore Apple's "price for volume" operation in the Chinese market. During this year's 618, Apple adjusted the price of the iPhone 15 series to varying degrees, and the highest discount even reached 2,250 yuan.

(Image source: Apple official)

Such a large-scale price reduction has indeed attracted many users to buy. Many of Xiao Lei’s friends chose to place orders during the 618 period. It is no wonder that iPhone sales have increased significantly in the second quarter of this year.

The only domestic mobile phone on the list is the Redmi 13C 4G from Xiaomi. This did not surprise Xiao Lei too much, after all, Xiaomi also relied on cheap 4G mobile phones to squeeze into the list in the previous few times, but this result also shows that Xiaomi still has the ability to compete with Samsung in the low-end and mid-range market.

Xiaomi sales exploded, Transsion surprised everyone

From the sales data, we can see that Xiaomi is the fastest growing among the top five mobile phone manufacturers, reaching an astonishing 27.4%. The hot sales in the Chinese market have become the biggest boost to Xiaomi's rapid global growth. Both Xiaomi Mi 13 and Xiaomi Mi 14 have achieved good sales of millions in China, and are also the best-selling flagship phones in the past two years.In addition, according to the latest news, in the week of July 22 to 28, Xiaomi surpassed its old competitors such as vivo and Huawei with an 18.6% market share and topped the sales list.

(Image source: Xiaomi official website)

However, if Xiaomi wants to continue to lead the world, it still needs to face fierce competition from international giants such as Samsung and Apple. This is not only a contest of technology and innovation, but also a game of brand influence and market strategy.

Vivo, which has been dominating the domestic market for consecutive years, also performed well. Although its current market share is only 9%, 6% less than Xiaomi, the year-on-year growth of 16.6% also proves the strong potential of vivo.According to the sales data of the Chinese market released by IDC, vivo once again won the championship in the second quarter.

(Photo credit: Lei Technology)

It is worth mentioning that vivo's sub-brand iQOO alone accounts for 5.5% of the overall market share, and is already the most successful of the current sub-brands. If vivo can better deploy overseas in the future and make iQOO an "X factor", the entire market structure is likely to undergo major changes.

Transsion, which ranks fifth, is a surprise to Xiao Lei. Transsion has almost no presence in the Chinese market. Today's achievements are all based on overseas markets. The integrity of its overseas layout and brand influence are the best among Chinese mobile phone brands. According to the financial report released by Transsion, Transsion's overall shipments in 2023 will be about 194 million units, a year-on-year increase of 24.23%. The annual revenue was 62.295 billion yuan, a year-on-year increase of 33.69%; the net profit was 5.537 billion yuan, a year-on-year increase of 122.93%. It is called the "King of Africa" ​​by the market.

(Photo credit: Lei Technology)

But the King of Africa's goal is not only Africa. According to relevant data, Transsion has blossomed in emerging markets such as the Middle East, Latin America, South Asia, and Southeast Asia. According to Canalys data, in the first quarter of 2024, Transsion's growth rate in Saudi Arabia reached 230%, with a market share of 25%, ranking first; in Southeast Asia and South Asia, Transsion ranked second in Southeast Asia with an 18% market share and an annual growth rate of 197%; in Indonesia and the Philippines, Transsion is still the king of the mobile phone market below US$100.

What is more worth mentioning is that Transsion is no longer limited to low-end and feature phones: it has launched the Phantom V Fold and V Flip foldable screen mobile phones for the high-end market in India. Although it will be difficult to compete with Xiaomi in a short period of time, it definitely has the opportunity to become a dark horse.

The last brand worth paying attention to is Huawei. Although its market ranking is only tenth, Huawei's year-on-year growth rate reached 40%. If it maintains this growth rate, it will not be a far-fetched thing for it to jump to the first place in the third quarter.

It can be seen from this that the sales ranking of a single model cannot directly reflect the difference in product strength between different brands. Nowadays, domestic mobile phones have far surpassed Samsung and Apple in many aspects such as battery, charging, camera, AI, and network. The price-performance ratio is also "far ahead" in the product line of the same price, but why have they not been able to defeat Samsung and Apple head-on?

(Photo credit: Lei Technology)

In Xiao Lei's opinion, in addition to insisting on innovation, it is also necessary to appropriately slow down the iteration cycle of mobile phones. Nowadays, the speed at which domestic manufacturers introduce new products has increased several times compared with previous years. Batches of new phones can be seen almost every month. However, mobile phones are non-essential consumer products for the people. If manufacturers blindly use the strategy of flooding the market with new phones, it will only backfire.

Therefore, in Xiao Lei's opinion, domestic manufacturers should streamline their product lines as much as possible so that each product line can correspond to consumers with different needs, rather than launching three or four products with very similar positioning and prices at once as they do now, which not only blurs the internal product positioning, but also brings a bad atmosphere to the industry.

As for how to strike a balance between "increasing presence through the strategy of flooding the market with products" and ensuring their own sales and profits, manufacturers have to figure it out themselves.

Global growth is good for domestic mobile phones

As mentioned above, the industry will always face many changes in the growth environment. Today, Samsung and Apple are still the top two in the mobile phone industry, but this situation may not last long. Xiao Lei can clearly point out that the ultimate beneficiaries of the growth in global smartphone sales will be Chinese mobile phone manufacturers.

There are two main reasons. The first is the "old saying" that Chinese smartphones have core competitive advantages. The second is the explosive sales of new categories, such as foldable screen and AI phones, which have tipped the balance of victory towards Chinese mobile phone companies.

(Photo credit: Lei Technology)

The so-called "core advantages" are naturally inseparable from performance, photography, battery life, etc. In terms of performance, everyone uses the top chips from the supply chain, but Chinese mobile phone manufacturers obviously maintain their lead in performance release (including heat dissipation materials and body structure optimization), photography performance (including exposure capabilities and interactive logic), and battery life (especially fast charging technology). As the global market recovers, manufacturers will first invest more resources to consolidate their leading advantages. At the same time, after entering more markets, overseas consumers will be able to recognize the leading experience of Chinese smartphones.

As for new product categories such as foldable screen phones and AI phones, Chinese manufacturers have already taken advantage of these two trends.

Let’s first look at foldable phones. According to Counterpoint data, the global growth rate of foldable phones in Q1 2024 reached an astonishing 49%, the highest peak in the past six quarters. Interestingly, three of the top four brands are from China (Motorola, Huawei, and Honor), and Huawei has surpassed Samsung to become the global sales champion of foldable phones.

(Image source: CounterPoint)

As for AI mobile phones, there are no statistics for this sub-category yet, but judging from the momentum, mainstream products in the Chinese market have at least popularized AI assistants and implemented functions such as AI call summaries. On the other hand, in the global market, the conditions for using Apple's AI assistant capabilities are very harsh (strictly speaking, it is in the internal testing stage), and Samsung's performance is not particularly outstanding.

On the whole, in the field of AI mobile phones, Chinese mobile phone manufacturers have higher popularity, playability and practicality. If AI mobile phones as a sub-category can grow as fast as foldable screen mobile phones in the future, then Chinese mobile phone manufacturers will naturally be in an advantageous position.

(Image source: Huawei official)

Therefore, in this increasingly stable market structure, mobile phone manufacturers should not pay too much attention to their market share rankings, but should think about how to use good products to establish deeper, long-term and stable relationships with users, which is the so-called improvement of user "stickiness".

For the "battle-hardened" Chinese mobile phone manufacturers, after experiencing ups and downs, they should have a longer-term strategic vision and stronger strategic determination, and it is very necessary to continue to build their core competitiveness to prepare for the future.

(Image source: vivo official website)

For example, the photography of Xiaomi, Huawei, and vivo, the AI ​​capabilities of OPPO, and the ecological capabilities of Lenovo, etc., have been verified by the market to be able to form a closed business loop, and are worthy of continued investment by mobile phone manufacturers to dig deep and strengthen their own moats.

In the long run, mobile phone manufacturers in an incremental market will be more actively exploring more possibilities. For example, whether the pace of going overseas will accelerate and whether some manufacturers will consider restarting their self-developed chip plans are all worth looking forward to.

The smartphone industry has gone through the most difficult and darkest era. Although the shipment volume is still more than 20% lower than the peak period of the mobile phone market, it still presents a positive "attitude" overall. With the arrival of the second half of the year, we can remain optimistic about the development of the mobile phone market and look forward to more innovation and competition to bring better product experience to consumers.

In the first half of 2024, the technology circle is surging.
Big models are being put into practice at an accelerated pace, with AI applications emerging in an endless stream, including AI mobile phones, AI PCs, AI home appliances, AI search, and AI e-commerce.
Vision Pro is now available in China, setting off a new wave of XR spatial computing;
HarmonyOS NEXT is officially released, and the mobile OS ecosystem has changed;
Automobiles have fully entered the "second half", and intelligence has become a top priority;
Competition in e-commerce is increasingly fierce, with low prices and even lower services;
The wave of going overseas is surging, and Chinese brands are embarking on the journey of globalization;

In the hottest month of July, Lei Technology's mid-year review is launched, summarizing the brands, technologies and products worth recording in the first half of 2024 in the technology industry, recording the past and looking forward to the future. Please pay attention.