Apple's US iPhone Market Share Drops to 33% in Q1 2024, Lowest Since 2017

Apple's dominance in the US smartphone market has taken a significant hit, with its iPhone market share dropping to 33% in the first quarter of 2024, according to data from Consumer Intelligence Research Partners (CIRP). This marks the lowest level for Apple since 2017, as the tech giant faces increasing competition and changing consumer preferences.

The decline in iPhone activations means that Android devices now account for two out of every three new smartphone activations in the US. Several factors are believed to contribute to this trend, including a lack of compelling new features in recent iPhone models and the increasing transparency of phone purchase plans, which has led more consumers to hold onto their current devices for longer.

The report suggests that the perceived lack of new features in recent iPhone models and the adequacy of existing phones, even older models like the iPhone 11, have contributed to this downward trend. The stability in iPhone design has also discouraged consumers from upgrading their devices, leading to a growing market share for Android devices.

Why this matters: The diminishing activation rates pose a significant challenge for Apple, particularly in the important US market, where it faces fierce competition from a wide range of Android devices across various price ranges and functionalities. Apple may need to reconsider its strategy, such as accelerating innovation, introducing more appealing features, or revising its pricing and upgrade policies, to regain its lost ground in the US smartphone market.

The decline in iPhone sales is not limited to the US market. Apple's smartphone sales in China fell by almost 20% in the first quarter of 2024, with its market share decreasing from 19.7% to 15.7%. Meanwhile, other Chinese brands like Oppo, Vivo, Huawei, and Xiaomi saw increases in sales.

Analysts believe the drop in iPhone sales is due to the increasing durability and longevity of Apple's devices, as well as a lack of significant technological innovation, leading US consumers to purchase fewer new iPhone models. However, there are conflicting reports on the upcoming iPhone 16 lineup, with some analysts predicting a 15% drop in Apple's iPhone shipments for the year, while others suggest the new models will feature improvements like a bigger Neural Engine and generative AI capabilities in iOS 18, which could potentially boost sales in the next few quarters.

Key Takeaways

• Apple's iPhone market share in the US dropped to 33% in Q1 2024, lowest since 2017.
• Android devices now account for 2 out of 3 new smartphone activations in the US.
• Lack of compelling new iPhone features and longer device lifespans contribute to the decline.
• Apple faces similar challenges in China, with Chinese brands gaining market share.
• Analysts predict mixed outlook for iPhone 16, with potential 15% drop or AI-driven sales boost.