Smartphone Shipment Forecast Down, IDC Warns

Smartphone shipments around the world are to increase modestly but are sharply down from previous forecasts, analyst house International Data Corp (IDC) has warned.

IDC announced on Thursday that worldwide smartphone shipments are forecast to grow just 0.6 percent year-over-year (YoY) in 2025 to 1.24 billion units.

This is dramatically reduced from previous shipment forecasts, after IDC in February predicted a 2.3 percent growth rate.

The analyst house cited “high uncertainty, tariff volatility and macro-economic challenges such as inflation and unemployment across many regions leading to a slowdown in consumer spending.”

Growth plunges

And IDC also stated that growth will remain in low single digits throughout the forecast period, with a five-year (2024-2029) compound annual growth rate (CAGR) of 1.4 percent due to increasing smartphone penetration, lengthening refresh cycles, and cannibalisation from used smartphones.

Amidst the gloomy prediction, it seems that the US and China are driving the 0.6 percent growth this year.

China is forecast to grow 3 percent YoY driven by government subsidies which will stimulate demand and continue to boost Android.

In contrast, Apple is forecast to decline 1.9 percent in 2025 due to ongoing competition from Huawei, overall economic slowdown, and the ineligibility of a majority of its models for government subsidies capped at 6,000 Yuan.

However, heavy discounts during the upcoming 618 shopping festival and the anticipated iPhone 17 launch with significant hardware upgrades are expected to boost demand and limit further decline, IDC predicted.

Trade war

“The US Market is forecast to grow 1.9 percent in 2025, but it was impacted from the ongoing US-China trade war as growth was pulled down from 3.3 percent due to increased uncertainty and tariff related price increases,” said Anthony Scarsella, research director with IDC’s Worldwide Quarterly Mobile Phone Tracker.

“Further negative impact was prevented by the unique structure of the US smartphone market, where majority of devices are bought through carriers which help fuel demand by offering robust trade in deals and interest free financing programs,” said Scarsella. “As a result, the forecasted 4 percent growth in average selling prices of smartphones will have less immediate impact on consumers, especially with many new premium devices launching in the second half of the year.”

“Since April 2nd, the smartphone industry has faced a whirlwind of uncertainty,” added Nabila Popal, senior research director with IDC’s Worldwide Quarterly Mobile Phone Tracker. “While current exemptions on smartphones have offered temporary relief, the looming possibility of broader tariffs presents a serious risk.”

“Recent signals from the US administration on potential tariffs hikes on smartphones manufactured outside the US further complicate long-term strategic planning for OEMs,” said Popal. “Smartphone vendors – particularly those shipping to the US – must now navigate complex geopolitics alongside ongoing supply chain diversification efforts. Despite these headwinds, India and Vietnam are expected to remain the key alternatives to China for smartphone production. However, additional tariffs of 20-30 percent on US bound smartphones could post a serious downside risk to the current US market outlook.”

Donald Trump

IDC’s Nabila Popal in her comments noted the problems since 2 April, which was when Trump announced his so called “liberation day” tariffs against nearly all countries.

Last week Trump re-escalated his trade threats, by threatening a 50 percent tax on all imports from the European Union, as well a 25 percent tariff on Apple products unless iPhones are made in America.

Trump’s first round of tariffs had raised prices for American consumers, and failed to produce the trade deals he had been seeking, or the widespread return of manufacturing to the US.

Indeed, after China refused to back down to the US tariff threats, Apple was forced to reconsider where it sourced its iPhones for the US.

In response to the ‘liberation day’ levies, Tim Cook sought to shift production of iPhones destined for the US market to India, saying in April that the majority of iPhones shipped to the US in the April to June quarter would be produced in India –a move that greatly irked Trump.

Apple had also chartered cargo flights to ferry 600 tons of iPhones, or as many as 1.5 million devices, to the United States from India in an effort to circumvent the worst of Trump’s tariffs.

Cook has also previously stated that Apple expects Trump’s tariff policies to lead to $900 million (£683m) in additional costs this quarter, with costs continuing to rise.

Meanwhile Apple is reportedly considering price increases for its autumn iPhone range, but is determined to avoid any appearance of relating the increases to US tariffs on Chinese imports, instead potentially attributing them to new features and design changes.

After many weeks of global turmoil and rising consumer prices in America, Donald Trump in May made the decision to suspend the punitive tariffs against China and other countries for 90 days.