Tariffs and Turbulence: IDC Slashes 2025 Smartphone Growth Forecast Amid Global Market Shifts
The global smartphone market is bracing for a challenging year ahead as International Data Corporation (IDC) revises its 2025 shipment growth forecast down to a mere 0.6%, a significant drop from the previously anticipated 2.6%. This adjustment underscores the mounting pressures from tariff-induced economic uncertainties and a noticeable decline in consumer spending.
Economic Headwinds and Tariff Turbulence
The revised forecast reflects the intricate dynamics of the global economy, where escalating geopolitical tensions and tariff disputes are reshaping consumer behavior and manufacturer strategies. The United States and China, two pivotal players in the smartphone industry, are at the epicenter of these shifts.
In China, government subsidies aimed at bolstering the domestic market have provided a cushion, leading to an expected 3% year-over-year growth in smartphone shipments. These subsidies predominantly favor Android devices, giving an edge to local manufacturers like
Conversely, Apple faces a projected 1.9% decline in 2025, challenged by intensified competition and economic pressures. Many of Apple’s models are ineligible for the aforementioned subsidies, placing them at a disadvantage in the Chinese market.
Apple’s Strategic Maneuvers
In response to these challenges, Apple is recalibrating its global strategy. The tech giant is expanding its manufacturing footprint in India and Vietnam, aiming to diversify production and reduce reliance on China. This move is also a strategic response to potential U.S. tariffs, with President Donald Trump indicating a possible 25% tariff on iPhones not manufactured domestically.
Despite these hurdles, Apple anticipates a 2.5% growth in U.S. iPhone shipments in 2025, slightly down from the previous forecast of 3.4%. Emerging markets like the Middle East and Indonesia offer a silver lining, with projected growth rates of 9% and significant demand resurgence, respectively.
The Rise of Local Competitors
Apple’s challenges are compounded by the resurgence of local competitors. Huawei’s launch of the world’s first tri-foldable phone, the Mate XT, priced at €3,499, marks a significant technological advancement. Despite facing U.S. sanctions and supply chain constraints, Huawei continues to innovate, capturing substantial market share in China and globally.
Xiaomi, another Chinese manufacturer, has reclaimed the top spot in China’s smartphone market for the first time in nearly a decade, with shipments surging nearly 40% year over year. Government subsidies and the demand for budget-friendly electronics have fueled this growth, positioning Xiaomi ahead of Apple in the competitive landscape.
Global Market Outlook
IDC projects that smartphone shipment growth will remain in the low single digits through 2029, with a five-year compound annual growth rate (CAGR) of 1.4%. Factors contributing to this subdued growth include increasing smartphone penetration, lengthening refresh cycles, and the cannibalization from used devices.
In the U.S., the smartphone market is expected to grow by 3.3% in 2025, even with the imposition of new 10% tariffs on goods from China, including smartphones. An aging installed base ready for renewal is anticipated to positively impact shipments for the year.
The global smartphone industry stands at a crossroads, navigating through economic uncertainties, geopolitical tensions, and shifting consumer preferences. Manufacturers are compelled to adapt swiftly, embracing innovation and strategic diversification to maintain competitiveness in an increasingly complex market landscape.
