Smartphone sales climb for the first time in years as brands target fast-growing regions like LATAM and Africa while leveraging AI to stay ahead.

After eight years of decline amid market saturation, the global smartphone industry has found renewed momentum. The third quarter of 2024 marked a 5% year-on-year rise in worldwide smartphone sales, with 310 million units sold. This represents the strongest Q3 growth since 2021, fueled by stark contrasts in performance between emerging and mature markets.

Mature regions such as North America, Europe, and China experienced restrained growth of 1%, 0%, and 4%, respectively, reflecting near-saturation levels. Meanwhile, emerging markets like Latin America and the Asia Pacific posted double-digit figures, positioning these regions as the primary battleground for smartphone manufacturers in this era of limited growth opportunities.

A significant trend shaping this resurgence is the rise of Chinese brands such as Xiaomi, Oppo, Transsion, and Vivo. These companies are gaining ground in emerging markets, cutting into the market share of industry giants like Samsung and Apple. This shift prompts critical questions: How long can emerging markets sustain their role as a growth engine? What gives Chinese brands an edge in these regions? And where should smartphone manufacturers direct their next strategic moves?

Why emerging markets remain a growth frontier

The launch of the iPhone in 2007 sparked a period of unparalleled growth in the global smartphone industry. This boom reached its zenith in 2016, with 1.47 billion units shipped. However, as penetration levels climbed, the market began to contract in 2017, signaling a new phase of saturation. While mature markets like North America and Europe have plateaued, emerging markets such as Southeast Asia, Africa, and LATAM continue transitioning from feature phones to smartphones, presenting untapped potential.

According to Canalys, smartphone shipments in Q3 2024 for Africa, Southeast Asia, LATAM, and the Middle East (excluding Turkey) were 18.4 million, 25 million, 35.1 million, and 12.2 million units, respectively, with year-on-year growth rates of 3%, 15%, 10%, and 2%. This growth stems from three factors:

1. Demographics and potential: Emerging regions are home to over 4 billion people, many of whom remain outside the smartphone ecosystem. Lower smartphone penetration rates, combined with younger, tech-savvy populations, offer significant room for growth. For example, LATAM’s median age is just 31, and nearly a third of its population is under 20 years old.
2. Transitioning markets: Many countries are still in the process of shifting from feature phones to smartphones. With global smartphone penetration at 68%, mature markets like North America and China have exceeded 90%, but regions like Sub-Saharan Africa and MENA lag at 43% and 54%, respectively.
3. Economic uplift: The expanding middle class in regions like Latin America is bolstering consumer spending. Poverty rates in the region fell from 45.4% in 2002 to 29.6% in 2018, increasing affordability for smartphones.

Chinese brands ascend as market leaders

Emerging markets have become top priority for smartphone manufacturers in recent years.

Chinese brands like Xiaomi, Transsion, and Oppo began exploring these markets as early as 2005. Today, they compete on equal footing with Samsung and have even become dominant in key markets like Africa. According to Canalys, in Q3 2024, Transsion retained its leadership in Africa with a 50% market share and 8% growth, while Samsung held 18%, with shipments plunging 30% due to weak demand in South Africa and reduced focus on entry-level models.

Africa’s smartphone market is shaped by its lower GDP per capita, leading to lower average prices. According to IDC, over 40% of smartphones in Africa cost under USD 100, and another 40% are priced between USD 100–200. High price-performance ratios remain critical; in Q3 2024, while the market grew by 3%, the average selling price fell by 6%, driven by aggressive pricing strategies for sub-USD 100 devices, which surged by 35%.

Transsion, an early entrant into Africa, leverages its first-mover advantage, localization strategy, robust supply chain, and deep distribution network to maintain its nearly 50% market share.

Localization has been pivotal to Transsion’s success. It developed features tailored for African users, such as cameras optimized for darker skin tones and durable, lightweight phone casings designed for the region’s heat and humidity. These innovations resonate deeply with African consumers.

While Transsion has a strong foothold in Africa, increasing competition necessitates a shift towards premium markets. In 2024, Transsion introduced flagship models like the Phantom X2 Pro 5G, Phantom V Fold, and Phantom V Flip 5G, expanding consumer options and reinforcing its dominance.

With a strong base in Africa, Transsion is now expanding into South Asia, Southeast Asia, MENA, and LATAM, using localized and differentiated strategies to increase its global impact. According to IDC, Transsion ranked third globally in overall market share in the first three quarters of 2024, with 14.3%, and fifth in smartphones with 8.8%. It leads in shipments in regions like Pakistan, Bangladesh, and the Philippines.

In Southeast Asia, Transsion shipped around 4 million smartphones in Q3 2024, capturing 16% market share and nearly surpassing Samsung. Growth reached a staggering 46%, driven by its localized approach and focus on consumer needs.

Transsion’s Infinix brand has also penetrated this market by offering affordable, high-performance gaming devices, resonating with the region’s mobile gaming enthusiasts.

In 2024, Infinix launched its gaming flagship GT 20 Pro, collaborating with popular games like PUBG Mobile, Mobile Legends: Bang Bang, and Honor of Kings. The GT 20 Pro has been featured as the official device for multiple esports tournaments. Infinix also partnered with gaming clubs to host campus mobile gaming tournaments, building deep connections with local gaming communities. By Q3, Infinix and Transsion’s Tecno brand ranked first and second in the smartphone market in the Philippines. In Indonesia, Infinix achieved rapid growth, ranking fourth in the smartphone market.

To meet the diverse imaging needs of users, Transsion has invested in solutions for photography across different skin tones and local scenarios. The company developed a multi-skin-tone imaging system, creating new standards for portrait photography and color science, which bolster its technical capabilities across regional markets.

AI-powered smartphones signal the next leap

As competition intensifies and market saturation looms, even the untapped potential of emerging markets faces challenges, including rising component costs and oversaturated channels. To counter these pressures, the global smartphone industry is turning to artificial intelligence as the next growth catalyst. IDC forecasts that shipments of AI-powered smartphones will skyrocket from 234 million units in 2024 to 827 million by 2027, representing a compound annual growth rate (CAGR) of 100.7%.

Transsion is leading this shift with a pragmatic approach to AI adoption, emphasizing tangible benefits over conceptual innovation. In September 2024, the company partnered with MediaTek to establish an AI lab in Shenzhen, aimed at accelerating the development of AI technologies for smart devices tailored to emerging markets.

At the 2024 Mobile World Congress (MWC), Transsion’s Tecno brand unveiled Tecno AIOS, an AI-driven operating system developed in collaboration with Google and MediaTek. This system integrates cutting-edge capabilities, including real-time translation, generative AI tools for creative tasks, advanced imaging optimized for diverse skin tones, and integration with localized apps for ride-hailing, navigation, and food delivery.

Transsion’s AI phone strategy prioritizes practical applications. For instance, the second-generation Tecno Phantom V Fold 5G incorporates comprehensive AI features, positioning the device as a tool for both productivity and entertainment. These innovations not only enhance the user experience but also support Transsion’s push into high-end markets, driving revenue growth.

To thrive in this new competitive landscape, manufacturers must balance two imperatives: expanding into emerging markets while innovating to meet the demands of the AI era.

For Chinese brands like Xiaomi, Oppo, and Transsion, these shifts offer critical moments to break through and secure their foothold in the global smartphone market.

#Technology #Smartphones #EmergingMarkets #AIInnovation #MobileIndustry