The US smartphone market registered yet another year-over-year decline in shipments in the first calendar quarter, this time down eight percent compared to Q1 2023.

The data was published by Counterpoint Research, which says the drop was partially due to supply chain issues pushing iPhone 14 shipments from Q4 2022 into Q1 2023, resulting in an unusually high base for comparison.

However, the market analysts also say there are other factors at play that indicate falling demand for smartphones, such as declining sales in the sub-$300 segment as carriers put more emphasis on higher-end, 5G-capable phones.

"Overall Android shipments decreased YoY, with the market's low end continuing to see consolidation and decreasing new product launches due to LTE devices being phased out in favor of 5G models in carrier channels," said Counterpoint senior analyst Maurice Klaehne. "The added costs of 5G connectivity make it challenging for OEMs to compete in the low-end space."

At the same time, upgrade rates are also low for US consumers, who are sticking with their older phones. IDC estimated earlier this year that users are extending the life of their phones to 40 months.

Almost all brands saw their shipments fall in the quarter, including Apple, Google, TCL, and myriad small vendors. However, Samsung uniquely saw a year-over-year boost in shipments thanks to its S24 lineup. The Korean phone maker's market share jumped from 27 percent to 31, at the expense of Google, TCL, and small brands. Apple, however, is still comfortably in first with 52 percent share.

While the smartphone market is faltering in the US, globally the industry is doing mostly OK, seeing an eight percent boost year-over-year in Q1, according to IDC. This is partly down to Chinese vendors performing strongly, especially in China itself, but Counterpoint says demand is growing in Europe, India, and the Middle East and Africa region, which was the fastest growing in its report. By contrast, only the US and Japan saw sales decline.

Recovery for smartphone makers in the US might hinge on generative AI, which may prove to be a bigger selling point than the typical incremental improvements most new models sport. Apple notably hasn't yet dabbled in AI on the iPhone, and when the company does, Counterpoint theorizes, it may reignite consumer demand.

Though if the struggles of the AI PC are anything to go by, the success of the AI smartphone might rest more on consumers believing its potential and buying into the hype rather than on the hardware itself boasting killer features. ®

https://www.theregister.com//2024/05/10/us_smartphone_sales/