Smartphone market shifts focus to installed base value and AI

The global smartphone market is shifting from a focus on shipment volumes and market share toward maximizing the value of the existing installed base. According to research from Counterpoint Research, eight major smartphone brands now account for over 80% of the world's active devices, with Apple holding approximately one-quarter and Samsung nearly one-fifth of the market.

Competition is evolving into an ‘Installed Base Economy,’ where brands prioritize service revenue, ecosystem integration, and AI experiences over pure hardware specifications. While Apple has successfully converted its large user base into stable service income, many Android OEMs still rely primarily on hardware sales and have significant room to grow in service monetization.

As hardware lifecycles lengthen due to improved durability and extended software support, brands are increasingly focusing on the ‘AI Experience Layer.’ Future differentiation will likely depend on a brand's ability to integrate large language models with operating systems and user context to provide personalized, commercially valuable AI experiences.