A recent report by Counterpoint Research paints a picture of the 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-over-year decline.
Despite the overall decline, brand loyalty remains strong. Apple maintained its dominant position with a stable market share of 52%. Samsung, on the other hand, took advantage of the situation, increasing its share slightly to 31% from 27% in the previous quarter.
The US smartphone market posted its sixth consecutive decline, but signs of recovery are emerging
Analysts attribute the decline to several factors. Jeff Fieldhack, Counterpoint’s director of research for North America, points to consumer behavior. Many phone users in the US seem to be holding on to their devices longer, likely due to the high launch prices of the iPhone 14 Pro and Pro Max in Q1 2023. The iPhone 15 series launched this year failed to replicate the same level of initial fervor for sales.
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Additionally, the sub-$300 segment, traditionally dominated by Android devices, also saw a decline in shipments. This trend can be attributed to the continued shift to 5G technology by handset manufacturers and operators. The deployment of 5G capabilities raises production costs. It makes it difficult for manufacturers (OEMs) to offer competitive prices in the budget segment. As Morris Klein, senior analyst at Counterpoint.
However, the report is not entirely devoid of optimism. Counterpoint predicts signs of recovery emerging in the third quarter (Q3) of 2024. This expectation stems from two main factors:
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New Launches: Traditionally, the third quarter has seen a wave of new phone releases from major manufacturers. These launches are likely to drive consumer demand and resume the upgrade cycle.
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Seasonal Growth and Technological Advancement: The upcoming holiday season, coupled with the potential introduction of smartphones with advanced features such as generating AI (potentially seen in the iPhone 16 series), could further boost sales.
Overall, the US smartphone market presents a complex picture. While near-term challenges remain due to consumer behavior and technology changes, the potential for recovery later this year remains strong. The success of this recovery will depend on how effectively manufacturers respond to consumer needs and expectations, particularly in terms of pricing and innovative features.
