The 2025 global smartphone demand predictions have been slashed to 0.6% growth, down from 6% in 2024. It is especially impacting Apple as its Chinese market erodes and the threat of US tariffs hits home.
What is worse, IDC predicts that there will be no recovery even by 2029. The iPhone goose that laid the golden egg has flown the coop.
China – Apple hit on two fronts
To encourage the local market, the Chinese Government offers a 6,000-yuan subsidy (about A$130) to purchase any Chinese-made (read Chinese-owned) phones. China’s economy is in freefall, and Huawei, BBK, Xiaomi, Motorola, and hundreds of local manufacturers are reaping benefits. Apple is not. There are also huge issues with it delivering Chinese-government-approved Apple Intelligence, or lack thereof (read Apple AI delayed until the coming year, even later).
USA – Make Apple in the US again, or else
The USA has decided that it’s not going to let Apple off the hook simply because it can move its Chinese production to India. President Trump has said no to Apple. “I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US.”
Apple was facing a 145% tariff on its Chinese-made phones, so this is just a slight reprieve until it can devise plans to ‘Make Apple in America Great Again’ (MAAGA).
I don’t know about you, but 25% more for an iPhone may be the straw that breaks the camel’s back. Although that tariff does not affect Australia, Apple will likely raise prices globally to compensate for local tariffs.
The Apple Intelligence issues are also relevant as Google steams ahead with Android 16 and Gemini 2.0. Apple may lose a lot of gloss over this.
Urgent Update – Tariffs to apply to all smartphones sold in the USA from 1 July
U.S. President Donald Trump said on Friday that a 25% tariff he says he will impose on Apple will also apply to Samsung and other smartphone makers that sell phones not made in the USA.
While this does not affect Australia at present it is possible that smartphone makers will raise prices globally to compensate for the tariff.
Rest of the world
Almost universally, smartphone sales are down and look like they will stay that way for some time.
While Australia may have escaped a ‘technical’ recession, disposable income is way down due to skyrocketing grocery, energy, phones/internet, health cover, insurance, local rates and taxes and many more of the inevitable costs of simply occupying a place on the planet.
Our retail spies tell us that three things are happening.
1. Huge interest in renewed (euphemism for recycled)
- Apple is most affected as it still upgrades iOS for iPhone 10 or later. JB Hi-Fi has 679 iPhones/models/colours from SE 2nd Gen (starting at $199) to iPhone 16 Pro Max ($2079).
- Samsung has 258 models/colours from the Galaxy S22 (starting at $439) to the S24 Ultra at $1159.
- Google Pixel has 61 models/colours, from the $529 Pixel 8A to the current $1419 9 Pro XL 512GB.
2. Premium phone sales have tanked
While everyone aspires to a premium model like the Samsung S25 Ultra ($2137 to $2437), buying last year’s S24 Ultra for $1649 makes a lot of economic sense. It has seven years of OS upgrades and security patches, and the same Samsung AI as the S25 Ultra.
In 2024, even when the market was hot, the real action had moved to the $800-$999 bracket, where you could get a great upper-midrange smartphone (including our 2024 phone of the year, the $999 Motorola Edge 50 Pro – an excellent upper-mid-range smartphone).
The real action now is <$500, where there are huge runout bargains on 2024 models. Motorola and OPPO own this market with some incredible feature-rich phones.
3. People are holding onto their phones longer
Some stats claim 30 months (Gen Alpha to Gen Z) and up to 48 months (Millennials and Boomers). However, the number of people changing phones each year has nosedived.
Why? Two reasons.
Phones are lasting longer with new battery technology, longer OS upgrades, and security patches.
There is a fear of the new AI technology and it is not the incentive to buy that phone makers tell you. Read Smartphone buying patterns are changing – AI is not the driver.
CyberShack’s view – 2025 Global smartphone demand slashed because money is too hard to come by
While we all want a new phone, the odds are that you will hold onto the old one or consider a refurb. Add cost of living and tariff issues, and Apple is suffering from the ‘perfect storm’.
Android is increasing its global market share and is now at 73%, as Apple dropped 3% in Q1 2025 to fall behind Samsung as the largest phone maker. In part, this was driven by concerns about Apple iPhone safety, but also because Android 15 made it pretty bulletproof and easy to Escape iPhones walled garden – Android makes it easy.
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