Apple's Q1 shipment volume dropped by nearly 10%! Strong competition from Android competitors rising

According to the latest statistical data from IDC, a top global market tracking agency, global consumer electronics giant Apple Inc. (AAPL.US) saw a significant drop of nearly 10% in iPhone shipments in the first quarter of this year, while the global smartphone industry as a whole showed a clear rebound.

IDC's statistics show that global smartphone shipments increased to 289.4 million units, an increase of approximately 7.8% compared to the same period last year. Samsung Electronics reclaimed the top spot. Budget brand Transsion saw a significant 85% increase in shipments, and Xiaomi's first-quarter data also rebounded, narrowing the gap with second-ranked Apple.

Since the launch of the latest generation iPhone series in September last year, Apple Inc., headquartered in Cupertino, California, has struggled to maintain sales growth in China, the world's largest smartphone market, and similar issues with Apple devices are affecting its global performance. IDC's preliminary data shows that iPhone shipments have decreased by about 5 million units compared to the same period last year.

"The smartphone market is emerging from the turbulence of the past two years and becoming stronger, but there are also significant changes happening," said Nabila Popal, IDC's research director. "Although the top two smartphone manufacturers both reported negative growth data in the first quarter, Samsung Electronics' overall position seems stronger than in recent quarters."

IDC researchers also found that as consumers increasingly choose high-end smartphones that they intend to use for longer periods, the global average selling price of smartphones is rising. The sales proportion of Apple's flagship smartphone device, the iPhone 15 Pro, may be higher, leading to higher revenue per unit. However, the company has had to take unusual discount measures to stimulate sales growth, with some retail partners in China reducing prices by about $180.

After a 4% decline in smartphone shipments in 2023, another well-known market research firm, Canalys, expects a moderate recovery in the global smartphone market in 2024, with shipments projected to grow by 4% to reach 1.17 billion units in 2024Will AI Smartphones Become Apple's "Game-Changing" Weapon?

Samsung Electronics announced a significant rebound in preliminary profits for the first quarter of 2024 in early April, reflecting a turnaround in its crucial semiconductor division and strong sales of the Galaxy S24 smartphone. Data shows that the world's largest memory chip maker reported a preliminary operating profit of about 66 trillion Korean won (approximately 49 billion U.S. dollars) on Friday, a year-on-year increase of 931.3%, surpassing analysts' expectations of 53.7 trillion Korean won. This growth marks the end of consecutive quarters of decline since the third quarter of 2022.

Analyst Dan Ives from top Wall Street investment firm Wedbush predicts that in terms of its artificial intelligence development opportunities, Apple's over 2 billion system-installed user base presents the "best" opportunity in the world. Ives believes that Apple's upcoming global WWDC event in June will be a "key moment" for the company's AI ambitions, and the analyst expects Apple to make a leap in AI smartphones through the release of the iPhone 16 scheduled for September this year.

"When it comes to artificial intelligence, they won't just be observing from the outside. This is one of the largest system-installed bases in the world, and it is a crucial moment for Apple to announce its artificial intelligence strategy," Ives stated.

With the advancement of AI technology, integrating more powerful AI large model capabilities into smartphones has become a mainstream trend in the tech industry. At the same time, the industry is actively addressing challenges related to this, such as the massive data processing capabilities of dedicated AI chips, energy efficiency, storage limitations, and privacy protection.

Currently, leading smartphone hardware manufacturers are independently developing large models and embedding offline-operable edge-side large models into new generation models to create so-called "AI large model smartphones." Compared to general AI large models that rely on cloud computing power, edge-side local large models can allow smartphone users to use products like ChatGPT more efficiently, conveniently, and securely. However, applying AI large models to smartphones is not easy, as it requires consideration of issues such as the scale of large model parameters, AI experience, and smartphone energy consumption, as well as bearing the cost investment scale of tens of billions of yuan annually from landing to iteration, which is a great test of manufacturers' strength.

However, "AI large model smartphones" will bring significant value to users and smartphone manufacturers: firstly, in the context of users' lack of motivation to upgrade their devices, AI large models will become an important bargaining chip for smartphone manufacturers in market competition, and also the most important technological means to enhance future sales expectations; secondly, AI large models are expected to become customized exclusive super assistants for each smartphone user in the future, revolutionizing the user experience of smartphones and all consumer electronics application terminals.

In order to run AI large models on smartphones, some smartphone hardware manufacturers are researching the integration of dedicated AI processors, which are designed specifically for efficient AI task processing to improve computational efficiency and energy consumption ratio. Manufacturers are also striving to combine cloud computing and edge computing, completing certain complex AI processing tasks in the cloud, while handling real-time or sensitive tasks locallyAs well as exploring techniques such as model pruning, quantization, and knowledge distillation to reduce the actual size and computational requirements of large models, making them suitable for running on resource-constrained application devices.

According to the forecast data from the well-known market research firm Counterpoint Research, it is expected that by the end of 2027, the shipment volume of AI smartphones with built-in generative artificial intelligence functions will exceed 500 million units. Counterpoint predicts that 2024 will be a key year for global AI smartphones, with an estimated shipment volume of only 100 million units, but the agency expects a compound annual growth rate of up to 83% in the AI smartphone market from 2023 to 2027