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Smartphone market’s long tail expected to grow in 2024

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In Short:

The smartphone market is expected to see smaller brands gaining ground in 2024, with a focus on various consumer niches and expanding into smaller cities. In 2023, long-tail brands saw their market share increase to 26%, with brands like Google Pixel and Lava showing significant growth. While top brands like Samsung are expected to remain steady, Xiaomi and Realme are looking to regain lost ground. AI and CMF will be key features for brands in 2024.

New Delhi: The smartphone market’s ‘long tail’ – or brands outside the top five such as Apple, Motorola, Transsion, Google, and OnePlus — are expected to gain further ground this calendar after a strong 2023, even as bigger rivals like Xiaomi and Realme are looking to regain lost ground, market trackers said.

Market Share Growth and Expectations

The long-tail smartphone brands saw their cumulative market share go up to 26% amidst a glut in 2023 from 19% in 2022, and analysts expect this to grow further to 27% this year. Market leader Samsung is expected to remain steady in the overall smartphone market, which is estimated to grow 3-5% in shipments in 2024.

Brands at both the premium and budget ends are expected to drive growth in shipments, with devices serving various consumer niches and further expanding into smaller cities, experts said.

According to Counterpoint Research, Google Pixel smartphones grew their market share in India by 111% on year in 2023 while Lava grew its share by 36%, Transsion by 31%, OnePlus by 33%, and Motorola by 13%. Apple iPhone sales increased 46% last year to reach a record 10 million units.

“These long tails were the highest year-on-year gainers across all the brands,” said Shilpi Jain, senior analyst at Counterpoint Research. “Having multiple products across the price points and strengthening multichannel presence helped (these brands) make their devices more accessible,” she said. Cumulatively, the revenue share of long-tail smartphone brands shot up to 39% in 2023 from 31% in 2022.

Competitive Landscape and Trends

Top five brands saw their market share sliding to 74% in 2023 from 80% in 2022 as Chinese players such as Xiaomi and Realme had a particularly challenging year in terms of shipments, experts said. The overall smartphone market remained flat at around 152 million units in 2023, according to Counterpoint.

That said, the long tail brands will face strong competition in 2024 from a resurgent Xiaomi and Realme, especially in the offline segment. Both brands are expanding heavily in the offline segment even as they keep their portfolio of devices leaner with fewer launches as compared to previous years.

Counterpoint’s Jain said while the longtail brands will maintain their strong performance, with Apple and OnePlus poised for further growth, most of the top five brands will also witness volume growth in 2024, driven by an increasing focus on the offline channels by bringing in more vendor schemes and higher margins.

To counter this, longtail brands are expected to focus largely on the colour-material-finish of the products, popularly known as CMF.

Future Trends and Innovations

Technology market research firm Techarc chief analyst recently termed CMF as an “unavoidable necessity for the brands to excite potential buyers in this segment”. AI (artificial intelligence) will be the anchor feature for the year, the analyst said.

To that extent, brands such as Motorola and OnePlus have already introduced special edition models in the market, while the likes of Google and Nothing will be focusing on AI-driven software experience to chart growth.

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