In addition to three folds, what new changes are there in the mobile phone market in 2024？

Original Rao Xiangyu titanium media

▎ Global mobile phone shipments are expected to increase by 5% in 2024.

Author | Rao Xiangyu

Edit | Zhong Yi

This article first appeared in Titanium Media APP.

After the successful mass production of Huawei’s three-fold mobile phone, Mate XT Extraordinary Master, the long-lost mobile phone market ushered in a long-lost carnival.

By introducing multi-directional bending flexible materials and brand-new hinge technology, Huawei Mate XT extraordinary master can realize a variety of folding methods from single folding to triple folding, and the maximum screen size has reached 10.2 inches, making it the world’s first mass-produced three-fold mobile phone. However, judging from the public selling price from 19999 yuan, Huawei Mate XT is obviously not aimed at the mainstream mass market, but at the more lucrative high-end market.

In fact, in addition to Huawei’s three-fold mobile phone, the smart phone market in 2024 has seen more new changes compared with the previous two years when the overall sales volume declined. From technology to brand competition pattern to industry growth rate, there are obvious differences.

In the midst of change, the inherent pattern of the global smartphone market is being broken.

Xiaomi gradually got rid of the label of "diaosi machine"

Since its birth, Xiaomi has always taken "extreme cost performance" as the main advantage of mobile phone category. In the early stage of development, through the cost-effective strategic play, the shipment of Xiaomi mobile phone did grow rapidly all the way.

From 2012 to 2014, the growth rate of Xiaomi’s mobile phone sales was 22.96%, 160% and 226% respectively. According to the data released by market research organization IDC in the third quarter of 2014, Xiaomi’s market share in China is 14.8%, surpassing Samsung’s 11% and Lenovo’s 12.8%, making it the largest smartphone manufacturer in China.

However, after this model, Xiaomi mobile phone was trapped in the brand dilemma of "diaosi machine". At the same time, it also makes it difficult for Xiaomi to enter the high-end market, and it is difficult to obtain the most profitable cake in the market.

According to public statistics, with a market share of about 17%, Apple has taken away 45% of the global mobile phone revenue and 85% of the global mobile phone profits. With a market share of about 20%, Samsung took about 17% of the global revenue (28% less than Apple), and then took about 12% of the global profit (73% less than Apple), while domestic mobile phones took about 38% of the global revenue with a market share of about 60%, and finally only took about 3% of the global profit.

So at the strategic meeting of Xiaomi Group in early 2022, Lei Jun made it clear: "High-end development is the only way for Xiaomi’s growth, and it is also a life-and-death battle for Xiaomi’s development. We must not be afraid of loss or sacrifice and move forward unswervingly."

After more than two years, Xiaomi’s share in the high-end market has begun to improve.

According to the latest data of Canalys, in the second quarter, among the top five manufacturers of global mobile phone shipments in the price range of more than $600, Xiaomi increased by 71% year-on-year with its continuous demand for 14 series, and its shipments ranked fourth. In the Asia-Pacific region (excluding Greater China), the mobile phone shipments of Xiaomi in the price range above $600 increased by 564% year-on-year; In Europe, the Middle East and Africa, millet shipments in this price segment increased by 100%.

Xiaomi disclosed in the second quarter financial report that in the Chinese mainland market, the price range of Xiaomi mobile phone from 3,000 yuan to 4,000 yuan increased by 5.4 percentage points, the price range from 4,000 yuan to 5,000 yuan increased by 3.5 percentage points, and the price range from 5,000 yuan to 6,000 yuan increased by 2.3 percentage points.

HarmonyOS’s market share has steadily surpassed IOS.

In the first half of 2024, Huawei’s mobile phone business entered a comprehensive recovery.

According to IDC data, in the first half of 2024, Huawei once again ranked first in the smartphone market in China with a market share of 17.5%, and the growth rate of mobile phone shipments in the first quarter and the second quarter was 110% and 50.2% respectively, leading the industry. Although external restrictions continue to tighten, Huawei’s supply capacity continues to improve, and the gap with Apple continues to narrow in the market above 4,000 yuan.

As the mobile phone business stabilized, Huawei’s revenue and profit performance also entered the fast lane of growth. In the first half of the year, Huawei achieved sales revenue of 417.5 billion RMB, a year-on-year increase of 34.3% and a net profit margin of 13.2%. According to this calculation, Huawei’s net profit in the first half of 2024 was 55.11 billion yuan, an increase of over 18% year-on-year, which exceeded the 50 billion mark for the first time. In the first half of 2023, Huawei achieved a total sales revenue of 310.9 billion yuan, a year-on-year increase of only 3.1%.

It is worth noting that the recovery of Huawei’s mobile phone business also means that HarmonyOS’s operating system has gained a firm foothold.

In the first quarter of 2024, the market share of HarmonyOS operating system in China reached 17%, surpassing 16% of Apple’s iOS for the first time, mainly due to the decline of Apple’s mobile phone sales and the popularity of Huawei’s mobile phones. In the first half of 2024, the market share of HarmonyOS operating system in China increased to 17.2%, up 66.7% year-on-year, and it has steadily surpassed iOS, second only to Android.

The HarmonyOS operating system was officially released on August 9, 2019, which lasted for 1,778 days. After four generations, the number of ecological devices in HarmonyOS has exceeded 900 million, and 2.54 million Harmony OS developers have invested in the development of the HarmonyOS world, with 4.35 million students studying in HarmonyOS School and 82.7 billion service calls per month.

Titanium Media APP understands that the native applications in HarmonyOS have entered a full-scale sprint stage, and more than 5,000 commonly used applications have all started development. In the fourth quarter of 2024, the official version of HarmonyOS NEXT will be pushed on more models, including Mate70 series.

Driven by AI, global shipments increased by 5% in 2024.

The decline of smartphones began to appear in the first quarter of 2022.

According to the statistics of CINNO Research, the overall sales volume of the smartphone market in China dropped by more than 20% in February of that year. OPPO, vivo and Xiaomi decreased by 45.7%, 38.6% and 20.1% respectively. On May 16th, China ICT Institute released a report saying that from January to March, the total shipments of mobile phones in the domestic market were 69.346 million units, down 29.2% year-on-year.

If we pull this statistical caliber back to ten years ago, we will find that in March 2012, the domestic mobile phone market shipped 39.586 million units. This means that the overall shipment level of the domestic mobile phone industry in the first quarter has been lower than that of the same period ten years ago.

Since 2023, with the outbreak of generative AI, large models and AI have almost become the standard in the smartphone market. This trend began to boost mobile phone sales in 2024.

Canalys predicts that the penetration rate of AI mobile phones will reach 17% in 2024, and this number will further grow rapidly in 2025, reaching 30%. Among them, Apple is still the number one player in this field, accounting for 51% of the market share of AI mobile phones with a shipment scale of 18 million units in the second quarter.

On September 20th, iPhone16 will be released soon. Although the only major change of iPhone16 compared with previous models is the addition of camera control buttons, it is worth noting that Apple Intelligence will launch a beta version next month, which is suitable for new iPhones, iPad and Macs and supports American English. In December, the supported languages will be extended to localized English in Australia, Canada, New Zealand, South Africa and the United Kingdom, and Chinese, French, Japanese and Spanish will be supported next year.

It is reported that the early version of Apple Intelligence will focus on text summaries, replies in emails and other messages, and photo editing. With the launch of the official version, the new system may allow Siri to control the iPhone or iPad more accurately, including using Siri to open a single document, move notes to another folder, send or delete emails, open specific publications in Apple News, send network links through emails, and require devices to provide article abstracts.

Canalys predicts that with the blessing of Apple Intelligence service, Apple is expected to achieve further value growth, and further encourage users to purchase Pro series models through differentiation strategy. Apple’s leading product attachment rate and its advantages in chip design, software ecology and cross-device linkage are expected to help it further strengthen its existing competitive advantage.

However, in the long run, the annual growth rate of the smartphone market will gradually enter a platform period after this year’s strong rebound, and it will grow moderately with a compound annual growth rate of 2% from 2024 to 2028.

(This article first appeared in Titanium Media APP)