International Data Corporation Korea (hereinafter Korea IDC) noted on the 17th that the shipment volume of domestic smartphones in the third quarter of 2024 is about 3.12 million units, a decrease of 10.7% from the previous year.
Despite the early launch of flagship smartphones from major brands, some demand decreased compared to the previous models due to ongoing economic uncertainty, a somewhat raised price range, and delays in the release of new artificial intelligence (AI) features. However, demand for AI smartphones is increasing in line with the on-device AI trend, and efforts by manufacturers to lower the entry barriers for AI smartphones appear to be ongoing.
The domestic smartphone market in the third quarter of 2024 showed negative growth, despite the early launch of new products from major brands and continued sales momentum for AI smartphones. Overall, the increase in smartphone launch prices has heightened consumer price burdens. Additionally, a decrease in market attractiveness for foldable form factors and delays in the release of new AI features are believed to have impacted demand reduction.
However, due to the launch of 5G (fifth-generation mobile communications) flagship and mid-range smartphones from major brands, the 5G market share reached 94.7%, achieving the highest share since its introduction. In terms of price range, the share of flagship products priced at $800 (about 1.15 million won) or more remained at 73.6%, the same level as the previous year. Going forward, manufacturers are expected to continue their sales strategy focused on the premium product line and seek opportunities to expand the AI smartphone market through software updates and the application of AI features in older models.
Looking closely at the domestic foldable market, the shipment volume recorded a significant decrease to 940,000 units compared to the previous year. The market, which had initially been expected to gain momentum with the launch of Samsung Electronics' Galaxy Z 6 series, has seen a reduction in attractiveness due to price increases, durability concerns regarding the foldable form factor, and a lack of foldable content. Additionally, the application of AI features to both new and older models seems to have led to a decrease in demand for new products.
Kang Ji-hae, a researcher at Korea IDC, said, "The domestic smartphone market is experiencing a new turning point with generative AI smartphones. Although the overall smartphone market is in a decline, the domestic generative AI smartphone market is expected to exceed an annual shipment volume of 10 million units by 2025 and grow around the premium product line and actively developing Android OS-based solutions."