European smartphone market falls 3 per cent in fourth quarter

Smartphone shipments into Europe, excluding Russia, experienced a 3 per cent year-on-year decline, totalling 37.8 million units in Q4 2023, according to a report released this week by technology industry analysts Canalys.

Notably, Apple reclaimed its top position in the ranking table, securing the lead after seven quarters behind Samsung, with a 1 per cent year-on-year growth to 12.4 million units.

Samsung, on the other hand, slipped to the second spot, facing a 12 per cent decline to 10.8 million units.

This shift marked a significant change in the vendor landscape, with notable growth from selected vendors compensating for the overall market decline.

Runar Bjorhovde, Analyst at Canalys, said that “high-end smartphones took a record share of the European market in Q4 2023.”

“Almost 40 per cent of smartphone shipments were priced at US$800 or higher,” he explained.

“The dominance of the high-end was mainly fueled by strong iPhone 15 Pro demand alongside consistent Galaxy S-series volumes and a growing Google Pixel,” he added.

Looking ahead, Canalys suggested that Apple aims to capitalise on the upcoming refresh cycle, exploring new market routes, such as the bank-as-a-channel approach co-piloted with Santander in Spain.

For Samsung, the focus remains on premium S-series and foldable devices, with an exploration of a service-based subscription model.

Beyond the top three vendors, the landscape shifted drastically in 2023, with Motorola standing out as the strongest-growing vendor, achieving extraordinary growth rates of 73 per cent year-on-year.

HONOR also made its mark by breaking into Europe’s top five in Q4 for the first time, reaching a significant milestone as it progresses toward an IPO.

According to Brandon Gurney, Research Analyst at Canalys, the competition is expected to become more intense in 2024.

“Competition has been fierce over the last years, but will only intensify further in 2024,” Gurney said, noting that “OPPO, vivo and realme aim to retake market share following the settlement of their patent disputes with Nokia”.

He explained that “HMD will seek to improve its position through its recently launched own sub-brand, specifically targeting European consumers and channel partners”.

Gurney added that “the expanding footprint of Nothing and TRANSSION’s brands will further fuel the competitive environment, presenting consumers with numerous excellent options over the coming years”.

Looking ahead to 2024, Runar Bjorhovde predicted that the European smartphone market will experience single-digit growth, driven by an impending refresh cycle of devices purchased during the pandemic.

He said the importance of a holistic approach by vendors, focusing on innovation, reliability, backend logistics, regulatory compliance, and a clear brand message.

“In the long run, vendors will increase focus on the on-device user experience with AI at the core, emphasising personalisation, ecosystem interaction, productivity, and entertainment,” Bjorhovde said.

“AI integration in smartphones will continue to advance steadily and is currently serving as a pivotal R&D-driven feature crucial to maintaining long-term competitiveness,” he added.

“Even so, vendors must ensure to educate consumers on maximising the power of on-device AI features to achieve strong returns on their investments,” Bjorhovde concluded.