Apple’s ambitious AI strategy failed to translate into market share gains in 2024, as the tech giant’s global smartphone presence declined despite the launch of Apple Intelligence and the AI-focused iPhone 16. According to data from Counterpoint Research, Apple’s global market share dropped to 18% in 2024, down one percentage point year-over-year, while iPhone sales fell 2% even as the overall smartphone market grew 4%.
The iPhone 16, released in September 2024 and marketed as Apple’s first AI-built model, was expected to trigger what Wedbush Securities analyst Dan Ives called a “golden” upgrade cycle. However, this anticipated surge in sales has yet to materialize. The underwhelming performance comes despite Apple’s significant push into artificial intelligence with Apple Intelligence, its suite of generative AI features designed to compete with offerings from Meta, Microsoft, and other tech rivals.
A critical factor in Apple’s struggles is the absence of Apple Intelligence in Greater China, one of the company’s most important markets. Apple is reportedly negotiating with local tech companies to bring its AI capabilities to the region, but these efforts have not yet borne fruit. The company’s challenges in China extend beyond AI availability, with fourth-quarter revenue missing estimates in Greater China.
Meanwhile, Samsung captured the largest global market share at 19% in 2024, partly due to the success of its AI-enabled S24 series, which significantly outperformed previous models. Chinese competitor Xiaomi experienced the fastest handset sales growth in 2024, further highlighting Apple’s competitive challenges.
Apple was notably late to the AI race, launching Apple Intelligence months after competitors like Meta and Microsoft introduced their generative AI features, and years after OpenAI’s ChatGPT revolutionized the industry in 2022. The Apple Intelligence features released so far have received mixed reviews, and availability remains limited to iPhone 15 Pro models and later devices. Apple has announced that users can expect additional AI-powered tools to roll out in April 2025, but the company faces persistent challenges as it attempts to leverage AI for competitive advantage in an increasingly crowded smartphone market.
Key Quotes
The iPhone 16, which Apple described as its first model built for AI
Apple’s own marketing positioned the iPhone 16 as an AI-first device when it launched in September 2024, signaling the company’s strategic pivot toward artificial intelligence as a core selling point for its flagship product line.
Wedbush Securities’ Dan Ives coined it a ‘golden’ upgrade cycle — but it hasn’t happened yet
This quote from prominent tech analyst Dan Ives captures the disconnect between Wall Street expectations and market reality, as the anticipated surge in iPhone upgrades driven by AI features failed to materialize in 2024.
Our Take
Apple’s AI stumble in 2024 represents more than just a temporary setback—it’s a cautionary tale about the challenges of translating technological innovation into market success. The company’s late entry into generative AI, combined with geographic limitations and mixed consumer reception, has allowed competitors like Samsung and Xiaomi to gain ground. What’s particularly striking is that Apple’s traditional strengths—brand loyalty, ecosystem integration, and premium positioning—weren’t enough to overcome its AI disadvantages. The China situation is especially problematic, as regulatory and partnership complexities create a fragmented AI experience that undermines Apple’s typically seamless global product strategy. As we move into 2025, Apple’s April rollout of additional AI features will be critical in determining whether the company can recover lost momentum or if competitors have established an insurmountable lead in the AI-powered smartphone era.
Why This Matters
This story reveals a critical inflection point in the smartphone industry where AI capabilities are becoming a key differentiator, yet even Apple’s massive resources and brand loyalty couldn’t immediately translate AI features into market dominance. The failure of Apple Intelligence to drive the expected “golden” upgrade cycle demonstrates that consumers may need more compelling AI use cases before upgrading their devices, or that Apple’s late entry and limited rollout strategy has cost it momentum.
The absence of Apple Intelligence in China is particularly significant, as it highlights how AI regulation and localization requirements can fragment the global tech market. This could force companies to develop region-specific AI partnerships and solutions, fundamentally changing how global tech companies operate.
For the broader AI industry, Apple’s struggles suggest that AI features alone may not be sufficient to drive hardware sales without demonstrable value to consumers. Meanwhile, Samsung’s success with its AI-enabled S24 series and Xiaomi’s rapid growth indicate that competitors are successfully leveraging AI to capture market share, potentially reshaping the smartphone hierarchy and demonstrating that first-mover advantage in AI implementation matters even for established brands.
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Source: https://www.businessinsider.com/apples-ai-iphones-fail-boost-global-market-share-in-2024-2025-1