The worldwide smartphone market started the year on a positive note, marking a significant improvement on the same period last year,” said Canalys Analyst Le Xuan Chiew. “Q1 2023 struggled due to a sluggish economy and inflationary pressures. But with the economy stabilizing, new product launches and strong promotional efforts, the market has rebounded, offering smartphone vendors an excellent opportunity to revitalize growth. Vendors are seizing new opportunities by promoting premium offerings that set them apart, such as cutting-edge AI features and services on flagship products, and using ecosystem-based product strategies. All eyes are on Apple in 2024, which is highly likely to make an AI announcement that would provide opportunities for the brand to drive its premium offerings and reignite product innovation across its ecosystem.”

“The market is increasingly price-polarized,” added Chiew. “The entry-level segment is saturated, with new offerings from Xiaomi and TRANSSION. Meanwhile, vivo, OPPO and Samsung aim to gain a larger share of the premium market by investing heavily in marketing and exploring new avenues for growth. By consistently promoting Galaxy AI, Samsung has successfully boosted sales of its S24 series, which has surpassed the performance of its predecessor. Looking ahead, vendors are ramping up investments in emerging regions, such as Latin America and Southeast Asia. These markets boast a flourishing middle class, where smartphone penetration continues to rise compared with saturated markets, alongside evolving preferences for high-end models.”

“Despite an upbeat market, it is vital that smartphone vendors keep a watchful eye on inventory levels,” said Canalys Research Analyst Lucas Zhong. “With uncertain global inflationary conditions, vendors are exercising caution in inventory management to mitigate the risk of oversupply and ensure financial stability. Anticipating a slight inventory correction in the second quarter of 2024, the channel aims to digest the aggressive shipments of past quarters, making room for new launches later in the year to bring about more sustainable longer-term growth.