Affordable Android devices, Apple AI, to keep smartphone growth alive: IDC

Affordable Android (NASDAQ:GOOG) (NASDAQ:GOOGL) devices and Apple’s (NASDAQ:AAPL) push into artificial intelligence are likely to help the smartphone market continue to grow this year, research firm IDC said.

The research firm said that smartphone shipments are likely to grow 5.8% year-over-year in 2024 to hit 1.23B units, following 12% growth seen in the first quarter and a 9% pickup in the second quarter.

“The improved forecast for 2024 cements the road to recovery for the smartphone market, driven by stronger growth for Android devices in China and emerging markets,” said Nabila Popal, senior research director with IDC’s Worldwide Quarterly Mobile Phone Tracker.

Popal added that Android devices will grow at 7.1% in 2024, while iOS devices are forecast to grow just 0.8% this year, due in part to increased competition in China and a stronger base in 2023.

“However, there is a potential upside to the iOS forecast, with a lot depending on how well the demonstrated GenAI use cases play out in the upcoming iPhone 16 launch and how soon Apple can establish local AI partnerships in China,” Popal added.

Popal explained that he expects iOS growth to trend higher in 2025, due in part to Apple Intelligence, “which is already creating a lot of excitement and is expected to gain momentum next year and encourage faster upgrades.”

Apple sent out invites earlier this week for its annual fall product event, where it is widely expected to unveil the iPhone 16, along with several other new devices.

AI smartphone boost

There has been a lot of excitement about the boost that AI may give to the smartphone market. Anthony Scarsella, IDC research director, said he is forecasting that generative AI features will separate certain devices from others and lead to 344% growth for generative AI smartphones, eventually taking 18% of the total smartphone market by the end of 2024.

However, they won’t be for everyone, Scarsella said.

“…GenAI-capable devices won’t come cheap initially, as the average selling price for these GenAI smartphones will be more than double the cost of non-GenAI capable devices, further driving the premiumization trend,” Scarsella explained.