William Gallagher
Despite the launch of Apple Intelligence, Apple has not seen the same growth in the recovering smartphone market as other players — but that's expected to change in 2025.
Throughout 2024, reports of smartphone shipments worldwide have tended to say that iPhone sales are down because of increased competition from Chinese rivals. Now two reports back that up, with the first also saying that Apple has failed to benefit from strong growth that has helped other vendors.
According to IDC, after two years of steeply declining smartphone sales, 2024 is now predicted to show a growth of 6.2% year over year. Yet the 2024 prediction for iPhones is a growth of just 0.4%.
IDC notes that Apple has had record-breaking performance in India, but that it has faced challenges in the US, Europe and especially China. Separately, Reuters has a report about sales in China that illustrates how strong the local market is there.
It says that overall, sales of non-Chinese smartphones fell 44.25% year over year in October 2024, according to government sponsored research. That research from the China Academy of Information and Communications Technology (CAICT) does not break down details, but does say Apple is the largest foreign manufacturer in the market.
CAICT does also back up the claim that the smartphone market is growing again after years of decline. Overall phone sales rose 1.8% year over year to. 29.67 million units in October.
Significantly, Apple Intelligence is not yet available in China — and has only slowly been rolling out in the US since the launch of the iPhone 16 range. Over the period of the research, then, Apple Intelligence has been more hype than anything else, but the hype has not sold iPhones.
"While we continue to believe GenAI [Generative AI such as Apple Intelligence] will revolutionize the user experience in the years to come," said IDC's Nabila Popa, "more investments are needed to increase consumer awareness and introduce a 'must have' feature that will rush consumers to the store and create that super cycle which everyone is waiting for."
What happens next
"For now, we expect GenAI smartphones will take their place in premium flagship devices," continued IDC, "and keep moving down in price tiers to rapidly grow to 70% of the smartphone market by 2028."
This expectation is why IDC believes Apple's fortunes will turn around in 2025. For 2024 when its iPhone grew 0.4%, Android rose 7.6% — but "the tides will turn as iOS is expected to grow."
IDC believes that for 2025, the iPhone will see a 3.1% rise year over year. At the same time, it predicts that Android's growth will be no more than 1.7%.
At present, though, there is no date for when Apple Intelligence will come to China. However, Tim Cook has been in China to discuss partnerships with local firms in order to comply with the country's regulations before launching the feature.
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Malcolm Owen
Christine McKee
Charles Martin
Amber Neely
9 Comments
Sounds to me like Apple will be right on time with functional AI in the handset.
Apple Intelligence is still in its infancy, not available globally as mentioned in the article, and not even close to being “done.” It’s only available on two generations of iPhone, which is the platform that will likely define its impact and acceptance. To suggest that something that still has more promises than fully baked consumable features is having an impact on a global sales is rather silly.
I can only relate to my personal experience so far with Apple Intelligence on iPad and Mac because I am still happily using an iPhone 14 Pro Max. The best thing I’ve found about Apple Intelligence so far on iPad and Mac is the ability to turn it off with one toggle. I tried it from day one and after several weeks found that it was consuming CPU cycles while providing no practical value for how I personally use my iPads and Macs. At some point when it’s fully fleshed out I’ll give it another look because I am positive about AI in general. I use ChatGPT every day to initiate searches and get answers to questions, knowing very well that it’s not always correct but can still get me pointed in the right direction.
I’m not sure how or when the availability of Apple Intelligence on iPhones will have a measurable impact on sales. The two generations of iPhones that support Apple Intelligence have a lot of compelling features that have little to do with Apple Intelligence. At this point in time I think it’s more the promise of what Apple Intelligence may eventually bring to the iPhone that is having an impact on sales. It’s now up to Apple to deliver on those promises.
Overall, Apple is in a good position software/hardware wise in comparison to its competition…. still early days.
There’s two ways to take this:
One: Apple Intelligence is really not out and so Apple isn’t competing with the other providers systems. They will catch up over the next year with their superior system.
Or
Two: Generative AI is not going to be something that most consumers care about or want to use. Right now they are just buying less expensive devices because times are hard, and many expect them to get harder. In that case Apple would be at a disadvantage.
I’ve read stories that say either way. The Jury is still out, but my money would lean toward the latter.
there's almost no reason to upgrade to the 16 from the 15 pro so that doesn't help. apples ai is a joke right now