Apple's struggles in key markets, particularly in China, are highlighted by competitors like Xiaomi and Huawei gaining market share through aggressive pricing and innovative technologies.

Looking ahead, IDC predicts that by 2028, generative AI will account for 70% of the smartphone market, suggesting a potential turnaround for Apple by 2025.

Apple's iPhone sales are projected to grow only marginally by 0.4% in 2024, contrasting sharply with the global smartphone market, which is expected to expand by 6.2%.

In comparison, Android device manufacturers are experiencing a robust recovery with a 7.6% growth, largely driven by strong performance in emerging markets where affordable devices are in high demand.

Despite the rising interest in generative AI, it has not yet significantly influenced consumer demand or prompted early smartphone upgrades, according to IDC's senior research director, Nabila Popal.

Popal emphasizes that increased investment in AI is necessary to develop must-have features that could stimulate consumer purchases.

Apple introduced new AI features branded as Apple Intelligence in October 2024, marking a significant innovation push from the company.

Analysts from Wedbush noted that critical iPhone upgrades and AI-driven cycles have led to a September quarter that was 'better than feared'.

While Apple remains the largest foreign smartphone manufacturer in China, the absence of Apple Intelligence in that market limits its potential impact on sales.

Currently, Apple Intelligence is available on the iPhone 15 Pro and the iPhone 16 lineup, which aims to encourage upgrades from older models.

However, the stagnation in consumer interest raises concerns about how effective Apple Intelligence will be in boosting iPhone sales as 2025 approaches.

The broader recovery of the smartphone market is attributed to pent-up demand for device upgrades, particularly in regions with lower smartphone penetration.