What Display Daily thinks: The smarpthone market is not surging or experiencing anything but an adjustment to anemic results in 2023. The high-end premium market and the budget market are squeezing out the middle tier of the market.
When the middle tier of the smartphone market faces a squeeze, it has notable implications for display suppliers to smartphone OEMs. First, there is a shift in demand dynamics, as high-end smartphone manufacturers may still require premium displays for their flagship devices, albeit in potentially reduced quantities. Alternatively, low-end smartphone makers may prioritize cost-effective display solutions to maintain competitiveness. T
his shift in demand can lead to intensified price pressure throughout the supply chain, with OEMs seeking lower prices and cost-saving measures from display suppliers. Display manufacturers know they need to diversify their customer base beyond smartphones, which is why they are exploring opportunities in other industries like automotive and wearable devices. However, those markets are far from being stable. Regulation may change the automotive display markets recent trend towards more in-car displays, and wearables are unpredictable as budget devices start to encroach on traditional premium brand products from the likes of Apple.
These market pressures may trigger consolidation among display suppliers, with smaller players potentially struggling to compete. The Chinese OEMs are fueling a better outlook for local display suppliers, and while Samsung is a behemoth that can sustain the Korean display industry, it is not going to be immune to any of these pressures. In fact, Samsung’s year-on-year growth was kind of anemic.
We are at the beginning of a new cycle in the smartphone market and it will be interesting to see how Xiaomi, Huawei, Transsion, Oppo, and vivo develop over the coming 24 months because, with their present trajectories, the center of power for smartphones is shifting to China with broad implications for the display industry..
Smartphone Market Shows Signs of Stabilization in First Quaeter of 2024
The latest Omdia smartphone preliminary shipment survey for the first quarter of 2024 indicates a notable uptick in overall smartphone shipments, totaling 300.4 million units. This marks an 11.6% increase compared to the same period in 2023, signaling a second consecutive quarter of year-on-year growth after a prolonged period of market stagnation and decline.
Key findings from the report highlight the resurgence of several Original Equipment Manufacturers (OEMs), with notable double-digit year-on-year growth recorded by Xiaomi, Honor, Motorola, and Realme. After that, both Transsion and Huawei experienced triple-digit growth, while Apple and Oppo saw a decline in shipments.
Samsung retained its position as the leading OEM with 60.4 million units shipped in Q1’24, driven by the performance of its latest S24 series flagship phones. However, competition from Chinese companies has intensified, impacting overall shipment levels.
Apple’s total shipments decreased to 50.7 million units in the quarter following a surge in the previous quarter attributed to the iPhone 15 series launch. Again, intense competition in the Chinese market, particularly from Huawei, has contributed to disappointing iPhone shipments.
Among other Chinese OEMS, Xiaomi’s shipments saw a marginal decline from the previous quarter but still reflected a notable year-on-year increase, indicating signs of recovery after a period of declining market share. Transsion, despite a slight decline in shipments, maintained triple-digit growth compared to the previous year, positioning itself as the fourth largest OEM globally. Oppo recorded modest growth in shipments, while facing increasing competition and grappling with a declining market size throughout 2023.
Motorola and Realme also exhibited growth in shipments, albeit to varying degrees, with Realme facing challenges amidst declining demand for low-end priced smartphones.
