- IDC dropped its smartphone forecast for 2025 to just 0.6% growth
- Tariff turmoil is driving the market down
- Still, IDC predicts that China and the U.S. will drive any growth
International Data Corp. (IDC) has lowered its smartphone forecast to grow just 0.6% in 2025 to 1.24 billion units, down from the 2.3% annual growth it predicted in February. IDC said that the drop is due to high uncertainty, tariff volatility and macro-economic challenges such as inflation and unemployment across many regions leading to a slowdown in consumer spending.
Tariff volatility can be seen in real-time as the Trump administration has threatened 25% tariffs on Apple’s iPhone. A move that was blocked by a federal court this Wednesday and then reversed by an appeals court on Thursday.
China and the United States are expected to drive the small amount of growth that happens, IDC said. China is forecast to grow 3% annually driven by government subsidies, which will stimulate demand and continue to boost Android. In contrast, Apple is forecast to decline 1.9% in 2025 due to ongoing competition from Huawei, overall economic slowdown and the ineligibility of a majority of its models for government subsidies.
"The U.S. Market is forecast to grow 1.9% in 2025, but it was impacted from the ongoing U.S.-China trade war as growth was pulled down from 3.3% due to increased uncertainty and tariff related price increases,” said Anthony Scarsella, research director with IDC's Worldwide Quarterly Mobile Phone Tracker in a statement. "Further negative impact was prevented by the unique structure of the U.S. 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.”
IDC said that the looming prospect of broader tariffs against smartphone makers will cause a further risk of a handset downturn in the U.S. “Additional tariffs of 20-30% on U.S. bound smartphones could post a serious downside risk to the current U.S. market outlook,” concluded Nabila Popal, senior director of data & analytics at IDC.