Sales of Apple's iPhones will exceed $200 billion next year as the model steadily increases its share of the $560bn smartphone market, according to a new report.
The iPhone will secure 40 per cent of the total smartphone hardware market by value in 2022 but is only expected to account for less than 20 per cent of devices sold, a Juniper Research report showed.
Although smartphone purchase cycles are lengthening, Apple has managed to convince users to purchase higher-priced models.
The Cupertino-based company has done this through a “curation of a strong hardware and software ecosystem, which other vendors have only limited opportunities to do in the current market”, the report said.
As a result, Apple’s average selling price will rise in the coming years, while Android devices will decline, unless they can leverage technologies like 5G or introduce new design features, such as foldable phones, into the market, it added.
Smartphone sales dipped in 2020 as discretionary spending took a hit amid the coronavirus pandemic-induced recession across the world. However, pent-up demand has helped smartphone sales to recover during the first half of this year.
Smartphone vendors shipped nearly 346 million devices during the January-March period, a more than 25 per cent annual surge in shipments, according to the International Data Corporation.
Apple said it had 1.5 billion active devices last year, a jump from 1.4 billion in 2019. In comparison, there are more than 2.5 billion active Android devices – including brands such as Samsung, Huawei and Xiaomi – with the platform supporting both premium and budget-conscious equipment, according to Google.
Despite the volume of devices, Android vendors are likely to struggle to compete in future, Juniper's report said. Vendors that focus on a particular segment and invest in premium features, such as audio and camera technology, will not appeal widely enough to compete at scale in the smartphone market, it added.
“Feature diversification alone is not enough for lasting success in the crowded smartphone market,” said Nick Hunt, the report’s co-author and associate analyst at Juniper.
“Apple and Samsung have succeeded in fostering brand loyalty, which smaller vendors have struggled with, despite many introducing new capabilities. These players need to pair strong features with strong branding to have sustained success.”
Meanwhile, Chinese smartphone-maker Huawei’s market share is expected to drop to just over 9 per cent next year, from 11 per cent last year due to US sanctions, according to Juniper. This is expected to positively affect other Chinese smartphone-makers.
“We expect BBK, the manufacturer of Oppo, Vivo, Realme and OnePlus smartphones, will have over 200 million smartphones shipped in 2022 … making it the third largest player,” the report said.