Korea IDC reported on the 13th that the domestic smartphone shipments last year were about 12.53 million units, a decrease of 7.7% compared to the previous year.
Despite a partial recovery in consumer sentiment amid ongoing economic uncertainty, the market has shown signs of contraction, particularly in the mid-to-low price segment, due to price increases and decreased replacement demand. However, flagship smartphone demand has increased thanks to the launch of generative artificial intelligence (AI) smartphones by major manufacturers and a significant expansion in the market, indicating ongoing efforts by manufacturers to secure new market demand and improve revenue.
Last year, while the demand for mid-to-low price smartphones in the domestic market contracted, consumer sentiment partially recovered, and intense competition in the AI smartphone market led to a slowdown in the annual growth rate. Meanwhile, the share of 5G continued to rise, recording an all-time high share of 90.2%. This seems to be influenced by the concentration of flagship sales of major brands in 5G (5th generation mobile communication) and the expansion of mid-to-low price 5G smartphone models.
The average selling price (ASP) of smartphones was estimated at 1.18 million won, and for price ranges, the share of flagship products priced at $800 (USD) or more saw a significant increase to 69.1% compared to the same period last year. Despite the overall price increase in smartphone launches, the competitive emergence of AI smartphones, particularly in the ultra-premium product range like Samsung Electronics' Galaxy S24 Ultra series, has driven high consumer demand, contributing to the increase in flagship market share.
In contrast, the domestic foldable market recorded a significant decrease in shipments, totaling 1.16 million units compared to the previous year. Despite technical updates, including the application of new AI features, the attractiveness of purchasing new foldable products has diminished due to price increases and the expansion of older model adaptations of new technologies. Additionally, the market exit of existing foldable users has also impacted demand. Considering the durability of foldable form factors and the performance of cameras and batteries, there seems to be a shift in demand towards the same flagship product range, the Galaxy S24 series.
Kang Ji-hae, a researcher responsible for mobile phone market research at Korea IDC, noted, "Despite the overall contraction of the domestic smartphone market in 2024 compared to the previous year, the domestic GenAI smartphone market achieved rapid growth with shipments of 8.6 million units," adding that "this signifies a new turning point for the domestic smartphone market, and AI has been utilized as a key point to stimulate purchasing demand, which major manufacturers have leveraged for securing new demand in the market and improving revenue."