Apple (AAPL) is struggling to keep pace with the competition, according to a study by IDC Research. This study was cited by Bloomberg and revealed that global smartphone sales bounced back in 2024 after two years of decline. The report revealed that smartphone shipments will rise by 6.2%, reaching an estimated 1.24 billion units this year. However, Apple’s iPhone volumes went up by just 0.4%, as the tech giant faces rising competition from Android-based competitors in China and emerging markets.
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AAPL Leads in Profitability
Interestingly, despite the modest growth in volumes, Apple continues to be the leader when it comes to profitability in the smartphone industry. This is because AAPL’s smartphones have an average selling price of $1,000, more than triple the average selling price of $295 for Android smartphones, according to IDC estimates. This study shows that there has been an uneven recovery of the smartphone market, which has faced hurdles in the post-Covid era despite advancements like artificial intelligence (AI).
What Is Driving Smartphone Growth in 2024?
The IDC report stated that much of the smartphone growth this year has been driven by pent-up demand and sales in regions with low smartphone penetration. This has been fueled by affordable devices from Android vendors, particularly in China. Apple, however, is expected to perform better in 2025 as its new AI features gain traction.
Nabila Popal, IDC’s research director, noted that as AI integration remains a key focus for major players like AAPL, “…GenAI continues to be a hot topic and top priority for many vendors, it is yet to impact demand significantly and drive early upgrades.”
However, globally, smartphone shipments remain below pre-pandemic levels, and IDC projects only low single-digit growth in the coming years. This could be due to various factors including longer upgrade cycles, market saturation in developed economies, and a growing market for used smartphones.
What Is the 12-month Price Target for Apple?
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 24 Buys, eight Holds, and two Sells. Over the past year, AAPL has increased by more than 20%, and the average AAPL price target of $245.06 implies an upside potential of 4.6% from current levels.
