The good news for Apple is that people are buying more smartphones. The bad news is, at least for now, that people are primarily buying smartphones from other manufacturers.
That’s the message from the latest data on the smartphone market, which suggests that while the recovery is well underway, Apple is struggling to catch up with rivals, meaning Apple’s bet on artificial intelligence as a way to reinvigorate iPhone sales will become even more important, particularly in the US and China.
Apple’s iPhone shipments rose 1.5 percent to 45.2 million in the June quarter from a year earlier, according to preliminary data from research firm International Data Corporation.
Overall, however, Apple’s market share fell to 15.8% from 16.6% last year, a figure that could be interpreted as dropping as other markets grew more quickly. Worldwide smartphone shipments increased 6.5% year over year to 285.4 million units, according to IDC.
The overall market growth will come as Chinese manufacturers grab a larger share of the lower end of the market, with the real benefit for Apple coming in the form of a wave of purchases of its high-end, AI-powered iPhone 16 model due out this fall.
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“The second quarter is something of a precursor to the launch of more AI-generation smartphones later this year, which could be the second biggest growth driver after 5G and foldable smartphones,” Will Wong, senior research manager, IDC Asia Pacific, said in the report.
Global smartphone sales to consumers, rather than shipments to retail stores, rose 6% year-over-year in the second quarter, according to separately released data from Counterpoint Research, the highest year-over-year growth rate since the second quarter of 2021. Apple’s consumer sales fell 1% as it struggled with sluggish device upgrades in the U.S. and losing share to local rival Huawei in China.
“However, sales in China improved during the 618 shopping festival, when Apple offered attractive discounts. In the second half of the year, new iPhones equipped with Apple Intelligence are expected to drive upgrade demand,” Counterpoint Research analysts wrote in the report.
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Apple shares rose 2% in premarket trading on Monday.
Email Adam Clark at adam.clark@barrons.com.
