Apple’s Big Debacle, After Losing Spot To Microsoft ‘Most Valuable Company’, Loses ‘Top Phonemaker Spot’ To Samsung As iPhone Shipments Drop; Worldwide Smartphone Market Up 7.8% in the First Quarter of 2024

Apple experienced a roughly 10% decline in smartphone shipments during the initial quarter of 2024, impacted by heightened competition from Android smartphone manufacturers vying for dominance, as per data from research firm IDC released on Sunday.

According to IDC data, global smartphone shipments saw a 7.8% increase, totaling 289.4 million units between January and March. Samsung emerged as the leading phonemaker with a 20.8% market share, surpassing Apple.

The significant drop in iPhone sales follows Apple’s robust performance in the previous quarter, during which it surpassed Samsung to become the world’s leading phone manufacturer.

However, Apple has now returned to second place with a 17.3% market share, while Chinese brands like Huawei are gaining ground.

Xiaomi, a prominent Chinese smartphone manufacturer, claimed the third position with a market share of 14.1% in the first quarter.

Samsung, headquartered in South Korea, launched its latest flagship smartphone lineup, the Galaxy S24 series, at the beginning of the year and shipped over 60 million phones during the period.

Data from Counterpoint indicates that global sales of Galaxy S24 smartphones surged by 8% compared to last year’s Galaxy S23 series within the first three weeks of availability.

In the first quarter, Apple shipped 50.1 million iPhones, a decrease from the 55.4 million units shipped during the same period last year, as reported by IDC.

Apple’s smartphone shipments in China contracted by 2.1% in the final quarter of 2023 compared to the previous year.

The decline stresses the challenges Apple faces in its third-largest market, where certain Chinese companies and government entities are restricting the use of Apple devices, mirroring U.S. government actions against Chinese apps on security grounds.

Apple, headquartered in Cupertino, California, is set to host its Worldwide Developers Conference (WWDC) in June, during which it will showcase updates to the software powering iPhones, iPads, and other Apple devices.

Investors are keenly observing for advancements in artificial intelligence (AI) development at Apple, as the company has been relatively silent on integrating AI technology into its devices.

Apple Just Lost Its Title of Most Valuable Public Company —

Earlier this year, Apple ceded its position as the world’s most valuable company to Microsoft.

Apple has recently been dethroned as the world’s most valuable public company, marking a significant shift on Wall Street.

During Friday’s trading session, Microsoft Corp reclaimed the coveted top spot, surpassing tech giant Apple Inc. for the first time in over a year.
Microsoft’s market capitalization soared to an unprecedented $2.89 trillion, outshining Apple’s last recorded market cap of $2.87 trillion.

While Apple’s stock witnessed a remarkable 48% surge in the past year, concerns over dwindling iPhone demand have already led to a 3% decline in 2024.

At the same time, Microsoft’s stock has seen a roughly 3% increase year-to-date, fueled by its robust foray into generative AI in 2023, which propelled its value by 57%.

Microsoft’s early emphasis on cloud computing also provided a substantial advantage.

To Apple’s disadvantage, consumers are holding onto their iPhones for longer periods, citing “incremental improvements” to new models.
Additionally, in China, restrictions on foreign smartphone usage and the release of Huawei’s new phone are posing further challenges.

Microsoft’s CEO Satya Nadella initiated Microsoft’s first investment in GPT-4-creator OpenAI in 2019 and accelerated the integration of generative AI into the company’s products by the summer of 2022, acknowledging a “frantic pace”.

Brad Reback, an analyst at investment bank Stifel, emphasized the importance of generative AI, stating, “It simply comes down to gen A.I.,” while noting Apple’s lack of a compelling AI report.

Even with the launch of its highly anticipated product, the Vision Pro mixed-reality headset, which is touted as Apple’s most significant release since the iPhone in 2007, its impact on earnings in 2024 is expected to be minimal.

In December, UBS analyst David Vogt forecasted sales of 400,000 units of the headset in the first year, adding approximately $1.4 billion in revenue, a figure deemed “relatively immaterial,” according to The Wall Street Journal.

Worldwide Smartphone Market Up 7.8% in the First Quarter of 2024
The first quarter of 2024 witnessed a notable upswing in the worldwide smartphone market, with preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker indicating a 7.8% year-over-year increase in global smartphone shipments, totaling 289.4 million units.

Despite lingering macroeconomic challenges in various markets, this marks the third consecutive quarter of shipment growth, signaling a robust recovery underway.

Ryan Reith, group vice president of IDC’s Worldwide Mobility and Consumer Device Trackers, noted the ongoing momentum in smartphone recovery, with optimism gradually building among leading brands.

While Apple secured the top spot by the end of 2023, Samsung reclaimed its position as the leading smartphone provider in the first quarter.

However, Reith anticipates both companies to maintain their dominance in the high-end market segment, amid the resurgence of Huawei in China and notable gains from other players like Xiaomi, Transsion, OPPO/OnePlus, and vivo.

As the recovery progresses, larger companies are expected to bolster their market share while smaller brands seek avenues for expansion and diversification.

Nabila Popal, IDC’s Worldwide Tracker team’s research director, emphasised the smartphone market’s evolving dynamics.

—Firstly, there’s a continued growth in value and average selling prices (ASPs) as consumers opt for pricier devices, anticipating longer usage periods.

—Secondly, there’s a notable shift in power among the Top 5 companies, which is likely to persist as market players recalibrate their strategies in a post-recovery era.

Popal accentuated Xiaomi’s resurgence after experiencing significant declines in recent years and Transsion’s establishment as a formidable presence in the Top 5, driven by aggressive growth in international markets.

In contrast, while the top two players experienced negative growth in the first quarter, Samsung appears to be in a comparatively stronger position overall than in preceding quarters.