Everybody has heard about GenAI on smartphones, like the new Apple Intelligence on new iPhone 16s or the previous Live Translate on Samsung Galaxy S24s. But so far, the reality is that GenAI has not significantly impacted demand, according to IDC.
“While GenAI continues to be a hot topic and top priority for many vendors, it is yet to impact demand significantly and drive early upgrades,” said Nabila Popal, senior research director at IDC, in a statement.
IDC has repeatedly said GenAI will revolutionize the user experience in coming years, but the there isn’t there yet. “We continue to believe GenAI will revolutionize the user experience,” Popal said. But smartphone makers need to invest more in raising consumer awareness and introduce killer apps to help consumers “rush to the store and create the super cycle that everybody is waiting for.”
The analyst firm’s long term forecast is that GenAI phones will gather steam while moving down in price, reaching 70% of the smartphone market by 2028. IDC said global smartphone shipments should grow by 6.2% in all of 2024, reaching 1.2 billion units, but that robust growth was largely due to Android sales of lower-cost phones in emerging markets and China.
The upward climb in 2024 came after two years of steep declines, and growth is expected to slow to low single digits from 2025 onward, with 2.6% annually from 2023 to 2028.
The big Android growth in China and emerging markets like Latin America is expected to reach 7.6% for all of 2024, primarily in low-cost devices, and is “pivotal” in the overall growth of 6.2%, IDC said. Meanwhile, Apple has faced challenges in large markets like China and even the US.
However, IDC sees a tide turning for Apple iOS in 2025 with 3% growth compared to 2024, compared to Android growth 1.7%.
Foldable devices are expected to grow more than 10% in all of 2024, even with a 7% decline in the third quarter. The overall pace of growth for foldables is slowing, as vendors turn toward investments in AI smartphones, IDC said.
The average sales price in Q3 2024 for an Android phone was $295, compared to the average sales price for an iOS device of $1,042. The overall smartphone average price was $437, according to IDC. Globally, Android makes up more than 80% of smartphone sales.