International Data Corp (IDC) slashed its 2025 global smartphone shipment growth forecast to 0.6 per cent from 2.3 per cent on Thursday, citing tariff-driven economic uncertainty and a pullback in consumer spending.
The downgrade signals challenges for manufacturers like Apple, who already face weakening sales amid escalating geopolitical tensions and tariff disputes.
IDC expects growth to remain in low single digits throughout the year, with a five-year (2024-2029) compound annual growth rate (CAGR) of 1.4 per cent due to increasing smartphone penetration, lengthening refresh cycles, and cannibalisation from used devices.
Despite geopolitical tensions, the US and China are poised to drive a modest 0.6 per cent growth in smartphone shipments this year.
China's market is projected to expand by 3 per cent year-over-year, bolstered by government subsidies favoring Android devices.
Apple faces a projected 1.9 per cent decline in 2025, challenged by Huawei competition and economic pressures, with many models ineligible for subsidies.
However, upcoming discounts during the 618 shopping festival in China and the iPhone 17 launch, featuring significant hardware upgrades, are expected to stimulate demand.
In response to US-China trade tensions, Apple is expanding its manufacturing in India and Vietnam to diversify production and reduce reliance on China.
However, President Donald Trump stated that Apple would face a 25 per cent tariff on iPhones sold in the US that are not manufactured domestically.
"Despite these headwinds, India and Vietnam are expected to remain the key alternatives to China for smartphone production."
"However, additional tariffs of 20-30 per cent on US bound smartphones could post a serious downside risk to the current US market outlook,” said Nabila Popal, senior research director with IDC's Worldwide Quarterly Mobile Phone Tracker.
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
