After crunching the numbers for the fourth quarter of 2023, Canalys reports that the global smartphone market showed year-over-year growth of 8% as 319.5 million units were shipped from October through December. For the full year, 1.14 billion smartphones were delivered which is a 4% decline from 2022. Apple not only was the leading manufacturer for the fourth quarter but it also was the leader for the full year for the first time ever.

Apple was the top smartphone manufacturer in 2023 for the first time ever
It’s hard to believe that Apple never led this category before last year, but the gang at Cupertino finally surpassed Samsung ending a long-running dynasty for the Korean manufacturer. Let’s start with the fourth quarter which saw Apple ship 78.1 million iPhone handsets, up 7% from last year’s Q4. Because the fourth quarter of 2023 was so strong, even with the increased shipments of iPhone units on an annual basis, Apple saw its share of the market decline from 25% to 24%. Still, that made the iPhone the most popular phone in the world during the last three months of 2023.

Samsung had a rough quarter as its fans were waiting for the January unveiling of its new Galaxy S24 line powered by Galaxy AI. For the quarter, Sammy shipped 53.5 million phones which was an 8% decline. The company’s market share declined three points from 20% to 17%. Xiaomi rode a strong fourth quarter that saw shipments rise 23% to 41 million units leaving it with a 13% slice of the global smartphone pie, up two points from the previous year’s Q4.

TRANSSION Holdings was next as the rapidly growing Chinese manufacturer saw its shipments rise 65% on an annual basis to 28.5 million. The company now has a 9% share of the global smartphone market, up from 6% during the same quarter in 2022. And in fifth place was vivo which shipped the same number of phones (23.9 million) during the 2023 fourth quarter as it did during the last quarter of 2022. However, vivo’s market share declined from 8% to 7%.

For all of 2023, Apple shipped a leading 229.3 million iPhones which was down 1%. But since that was better than the 4% decline for the overall market in 2023, the iPhone’s market share globally rose to 20% from 19% in 2022. Samsung went from number one in 2022 to number two in 2023 thanks to a 13% decline in shipments for the year. The company delivered 225.4 million phones, approximately four million fewer than Apple, and its market share declined from 22% to 20%.

Xiaomi was third with 2023 shipments amounting to 146.4 million units, a 4% decline. Xiaomi had a 13% slice of the global smartphone pie last year. After delivering 100.7 million smartphones for 2023, 11% fewer than the number shipped in 2022, Oppo was next and had 9% of the global smartphone market. And that leaves TRANSSION Holdings to round out the top five.

TRANSSION was the only manufacturer among the top five to show a year-over-year gain in shipments (27% to be precise), and the 92.6 million phones it shipped during the year gave it 8% of the market, up 33% from the 6% it held in 2022.

AI will become a major differentiator between smartphone brands
Toby Zhu, senior analyst at Canalys, says that two letters will be driving smartphone manufacturers in 2024. “Investing in on-device AI for the high-end segment and expanding shipments in mid-to-low-end segments will become two strategic directions for smartphone vendors in 2024. AI will span from product level differentiation to operational and corporate strategy, varying across companies.”

Zhu adds, “Samsung will incorporate generative AI in its long-term product strategy. At the same time, Chinese vendors such as Xiaomi, vivo, OPPO and HONOR have already released flagship devices with gen AI capabilities in their home markets.” Apple is expected to add AI capabilities to the iPhone and Siri when it releases iOS 18 later in the year although iPhone users might have to wait for the iPhone 17 to receive big-time on-device AI features.