A recent report by Counterpoint Research paints a picture of a US smartphone market in flux. The first quarter of 2024 witnessed an 8% decline in shipments compared to the same period in 2023, marking the sixth consecutive quarter of year-on-year decrease.
Despite the overall decline, brand loyalty remained strong. Apple retained its dominant position with a steady 52% market share. Samsung, on the other hand, capitalized on the situation by increasing its share slightly, reaching 31% from the previous quarter’s 27%.
US Smartphone Market Sees Sixth Consecutive Decline, But Recovery Signs Emerge
Analysts attribute the decline to several factors. Jeff Fieldhack, Counterpoint’s Research Director for North America, points to consumer behavior. Many US phone users seem to be holding onto their devices for longer, likely due to the high launch prices of the iPhone 14 Pro and Pro Max in Q1 2023. The iPhone 15 series, released this year, hasn’t managed to replicate the same level of initial sales fervor.
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Furthermore, the sub-$300 segment, traditionally dominated by Android devices, has also seen a drop in shipments. This trend can be attributed to the ongoing shift towards 5G technology by phone manufacturers and carriers. Implementing 5G capabilities raises production costs. Making it difficult for manufacturers (OEMs) to offer competitive pricing in the budget segment. As highlighted by Maurice Klaehne, Senior Analyst at Counterpoint.
However, the report isn’t entirely devoid of optimism. Counterpoint predicts signs of recovery emerging in the third quarter (Q3) of 2024. This anticipation stems from two primary factors:
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New Launches: Traditionally, Q3 witnesses a flurry of new phone releases from major manufacturers. These launches are likely to stimulate consumer demand and reignite the upgrade cycle.
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Seasonal Growth and Technological Advancements: The upcoming holiday season, coupled with the potential introduction of smartphones featuring advanced features like generative AI (potentially seen in the iPhone 16 series), could further boost sales.
Overall, the US smartphone market presents a complex picture. While short-term challenges persist due to consumer behavior and technological shifts, the potential for a rebound later this year remains strong. The success of this recovery will depend on how effectively manufacturers address consumer needs and expectations, particularly regarding pricing and innovative features.
