Smartphone Market Is Estimated To Witness High Growth Owing To Rising Demand For Advanced Features & Rising Urbanization
The Smartphone Market is estimated to be valued at US$ 681.15 Bn in 2024 and exhibit a CAGR of 5.2% over the forecast period 2024-2031. The market growth is driven by the growing demand for smartphones with advanced camera features and connectivity options such as 5G. Furthermore, the rising urbanization coupled with improving digital infrastructure is expected to boost the adoption of smartphones globally.
Market Dynamics:
The growth of the global smartphone market is driven by the rising demand for advanced features and growing urbanization. Firstly, consumers are increasingly demanding smartphones with advanced camera capabilities such as high megapixels, improved image stabilization and night photography modes. This has encouraged smartphone manufacturers to focus on camera innovations and technologies. Secondly, the rapid urbanization has improved digital and internet connectivity infrastructure across major cities. The availability of reliable high-speed networks has enhanced the utility of smartphones for various applications ranging from social media to online shopping. This has boosted the appeal of smartphones, especially among urban populations. While these factors will continue driving sales, high replacement rates remain a key determinant of long-term market opportunities.
Major Market Drivers
Increasing Adoption of 4G/5G Networks Driving Smartphone Sales
The rollout of advanced 4G and new 5G networks globally has increased internet speeds and connectivity significantly. This has made high-bandwidth applications and services more usable on mobile devices. Consumers are now increasingly relying on their smartphones for video streaming, online gaming, social media and more. To take full advantage of the speeds offered by 4G/5G, buyers are upgrading to newer smartphone models that are optimized for these networks. This network effect is a key driver boosting sales in the global smartphone market.
Pricing Strategies and Financing Options Improving Affordability
Smartphone manufacturers and mobile carriers have employed innovative pricing strategies to make flagship devices more affordable. Devices are now commonly available at attractive monthly payment plans or bundled with service contracts. Used and refurbished phone sales have also risen. Additionally, low-cost or budget smartphones catering to different price points have increased accessibility. Financing programs offering deals and incentives are also stimulating sales volumes. Collectively, such measures have made smartphones attainable for wider consumer segments, helping market growth.
Major Market Restraints
Intensifying Innovation Fatigue Among Users
As iterative annual upgrades bring only marginal improvements, many existing users see less incentives to replace functioning phones prematurely. High performing devices from a couple of years ago still fulfill normal usage needs. This has resulted in users extending replacement cycles or sticking to existing devices for longer. Faster innovation in surrounding technologies like AI or foldable displays also means smartphone advances appear less dramatic by comparison. Prolonged replacement cycles stunt sales opportunities each year for vendors.
Growing Second-Hand Phone Market Impacting New Sales
The market for refurbished and used smartphones has boomed significantly. Various platforms facilitate easy resale of barely used phones for a fraction of original prices. Buyers also see value in pre-owned phones that are virtually indistinguishable from new ones. This appealing used phone market satisfies budget-minded shoppers and diverts them from new phone considerations. It pressures vendors to continually reinvent themselves and develop novel features justifying investments in latest models. A flourishing second-hand market threatens the commercial interests of smartphone manufacturers.
Major Market Opportunities
Incorporating Emerging Technologies for Competitive Edge
Trailblazing the integration of cutting-edge technologies like artificial intelligence, 5G, foldable displays and augmented reality gives vendors a shot at cornering first-mover advantages. Those delivering compelling new user experiences and differentiation through fusion of such innovations stand to bolster brand affinity and increase repeat patronage. Early investments to shape the future direction of the industry can herald big returns if execution is done right and customer desires are anticipated accurately. Pioneering new paradigms presents a bright opportunity.
Expanding into High-Growth Emerging Markets
While mature smartphone markets in developed nations saturate, demand momentum has naturally shifted to developing economies in Asia Pacific, Latin America, Middle East and Africa. Lower-cost feature phones still predominate in these regions representing untapped potential. Tailored devices and localized messaging addressing needs of Tier 2/3 cities can unlock exponential userbase. Particularly countries witnessing accelerated digitization and rising disposable incomes provide a landscape ripe for expansion. Targeted debuts capitalizing on emerging market forces promise robust gains over the long haul.
Link: https://www.coherentmarketinsights.com/market-insight/smartphone-market-3455
Key Developments:
- In December 2023, POCO unveiled its new POCO M6 5G smartphone, which set a new benchmark for smartphone imaging and design. The device boasts a 17.12 cm (6.74 inch) HD+ display, with dimensions of 168 mm in height, 8.19 mm in depth, and a weight of 195 g, offering a compelling combination of screen size, portability, and overall footprint.
- In October 2023, MediaTek announced a strategic partnership with Vivo to enhance the AI capabilities of Vivo's smartphones. This collaboration will focus on developing and deploying AI models at an unprecedented scale, which will revolutionize the user experience of Vivo devices. A key highlight of this partnership is the implementation of 1 billion and 7 billion AI large language models, as well as a 1 billion AI vision large model, directly on the device side, enabling on-device generative AI capabilities.
- In June 2023, Qualcomm announced an extended collaboration with Sony to power the next generation of Xperia smartphones using Snapdragon platforms. The companies have agreed to work together on future premium, high-tier, and mid-range Sony smartphone models. This joint effort will focus on integrating Qualcomm's advanced Snapdragon mobile platforms into Sony's smartphone lineup, aiming to provide users with enhanced functionality, higher performance, and more immersive experiences.
- In February 2023, Qualcomm and Samsung announced a strategic partnership to equip the global Galaxy S23 series with Qualcomm's latest and most powerful Snapdragon processor. Qualcomm revealed that the flagship Galaxy S23 lineup is powered by the premium Snapdragon 8 Gen 2 Mobile Platform for Galaxy, which accelerates performance to new heights, setting a new standard for connected devices.
Key Players:
Apple, Google, Honor, Huawei, Microsoft, OnePlus, Oppo, Realme, Samsung, Sony, TCL, Tecno, Transsion, Vivo, and Xiaomi
