The last two years have not been exactly rosy for the smartphone market. In a difficult economic environment and periods of high inflation, many consumers preferred to delay switching devices. This is despite the attractive commercial offers from sellers and the numerous technological innovations introduced.
How will the smartphone market develop in 2024 at a time when the economic environment is still uncertain? Can buyers hope to find a cheap and efficient smartphone? So many questions that we investigated.
A market returns to growth
Smartphone sales have been at their lowest level for many months. According to the company CounterPoint Research, this situation is mainly due to the Covid-19 pandemic, which has had a significant impact on several areas: the demand for mobile devices, but also the entire supply chain for this. Certain components have become even rarer and more expensive than before, such as semiconductors. Added to this is the cost of living, which has increased significantly in several countries around the world. As a result, consumers have put off purchasing non-essential goods, including phones.
Market participants and buyers are starting to see the light at the end of the tunnel, as it is now much easier to find a cheap smartphone. A November 2023 report from CounterPoint Research states: “In October 2023, global monthly smartphone sales posted their first annual growth since June 2021, ending a 27-month streak of consecutive year-over-year declines,” the analysts explain. In other words: the global smartphone market is slowly but surely recovering. Another encouraging sign: the month of October recorded the highest sales since January 2022.
This upswing was led primarily by emerging markets, according to the study. The strongest growth was recorded in the Middle East and Africa. China is also at the origin of this rise, thanks in particular to the return of Huawei to the country. Sales are also increasing in India. In Europe, however, the recovery is somewhat slower.
Is a price increase expected?
The year 2024 therefore promises to be more fruitful for smartphone manufacturers than previous years. Samsung, for its part, wants to take advantage of this trend.
At the end of November, the Korean giant announced a price increase for its CMOS image sensors to its customers, i.e. manufacturers of phones and electronic devices. According to the Chinese magazine Money, the average price of these components will increase by 25% in the first quarter of 2024. For other parts the price will increase by 30%. Note that these price increases mainly affect sensors with resolutions of 32 megapixels and more, which are equipped with the most powerful smartphones. Although an immediate impact on device prices is unlikely, this news will ultimately impact smartphone buyers' wallets.
At Apple, the prices for smartphones are also rising due to the skyrocketing manufacturing costs. For example, for the iPhone 15 Pro Max, the total component cost is $558, which is 12% more than its predecessor, the iPhone 14 Pro Max. Despite this, the Apple brand has reduced the prices of its latest phones in France.
Although a sharp increase in smartphone prices is currently not expected, the market remains fragile. The coming months will be crucial for all players in the industry, but also for consumers.