What caused 450 companies to depart the global smartphone market, from 700+ in 2017 to 250 in 2023.
The global smartphone market has experienced significant growth, with a peak of 700+ brands in 2017. However, the number of active brands has fallen by two-thirds to almost 250 in 2023, according to Counterpoint. The market is now tracking sales of these brands across over 70 key countries, indicating a shift in the industry's dynamics.
The decline of smartphone brands is attributed to factors such as the rise of Chinese brands, lack of R&D spending, a maturing user base, improved device quality, longer replacement cycles, economic headwinds, supply-chain bottlenecks, and major technological transitions like 4G to 5G. The key drivers for this market consolidation trend include a maturing user base, better R&D innovations, competition from larger brands, and tough macroeconomic conditions.
The demise of “local kings”
The number of active smartphone brands has largely decreased to local brands, with most operating in lower price bands exiting the market. These brands, once known as "local kings," have been fragmented across regions like Asia-Pacific, Latin America, and Middle East & Africa. Local brands like Micromax and Symphony have lost significant share over the last five years.
Small brands have declined due to their inability to keep up with the rapidly evolving smartphone industry. They have been largely dependent on white-label devices and capitalized on the market's transition from 2G to 3G/4G, benefiting from strong entry-tier demand in Africa, Asia, and Latin America. However, as the market matures, there is now greater demand for better specifications, design, brand value, and ecosystem integration.
Tough competition from emerging Tier-1 Chinese brands
The rise of Chinese brands like Xiaomi, Oppo, and Vivo has accelerated the decline of small brands, as they offer better smartphones at aggressive prices. The Covid-19 pandemic further accelerated this decline, with component shortages affecting global smartphone brands. Big brands have been able to increase profit margins, while small brands struggled to maintain operations.
