Global smartphone shipment growth hits 1% in Q2 amid US tariff worries

Global smartphone shipments grew just 1 per cent in the second quarter of 2025, signalling a cautious consumer mood as US tariff threats and broader economic uncertainty weigh on spending, especially for cheaper models.

According to preliminary data from research firm International Data Corporation (IDC) cited by Reuters on Monday, worldwide shipments reached 295.2 million units between April and June, slowing from 1.5 per cent growth in the previous quarter.

Tariff-driven uncertainty bites into demand

IDC analysts say the threat of US tariffs is dampening consumer confidence across multiple markets. Buyers are becoming more selective, delaying upgrades, or cutting spending on low-end devices most sensitive to price. “In the face of ongoing political challenges, the impact of war, and the complexities posed by tariffs, the 1 per cent growth in the smartphone market stands as a critical indicator that the market is poised to return to growth,” Anthony Scarsella, research director for Client Devices at IDC, told Reuters.

Nabila Popal, IDC’s senior research director, noted that tariffs and economic jitters are hitting the budget end of the market hardest. “Economic uncertainty tends to compress demand at the lower end of the market, where price sensitivity is highest. As a result, low-end Android is witnessing a crunch weighing down overall market growth.”

China slowdown drags on global demand

China, the world’s biggest smartphone market, was a particular weak spot in the second quarter. Subsidies meant to boost sales fell short of expectations, and overall demand contracted. Apple, despite heavy promotional efforts, saw its shipments dip by 1 per cent in China during the quarter, IDC data showed, according to Reuters.

IDC has previously warned that tariffs between the US and China could spill over into weaker consumer sentiment globally. In May, the firm cut its forecast for 2025 global smartphone shipment growth to 0.6 per cent, down from an earlier 2.3 per cent, explicitly citing tariff-driven economic headwinds.

Industry strategy: Fewer units, higher prices

Facing a slowdown in unit sales, smartphone brands are pushing to maintain revenues by moving customers to higher price points. According to Reuters, IDC said manufacturers are adding premium features like AI tools even in lower-priced models to encourage buyers to spend more, hoping to offset the crunch in volume.

This strategy is especially crucial in a market where low-end Android models are suffering the sharpest demand decline. While the strategy helps margins, it also risks pricing out the most cost-sensitive buyers.

Samsung leads growth, Apple holds steady

Despite the broad slowdown, some brands outperformed. Samsung posted the strongest growth among top manufacturers, shipping 58 million units in the quarter, up 7.9 per cent from the previous year. While, Apple maintained its place as the second-largest seller, with a modest 1.5 per cent increase in shipments globally.

IDC analysts said Samsung’s growth was driven in part by its broad portfolio, which includes both premium and mid-tier devices, helping it capture demand across price bands even as overall sales slow.

Looking ahead: muted optimism

IDC’s updated outlook reflects a cautious industry bracing for more uncertainty. The firm sees only 0.6 per cent shipment growth for 2025 overall, with tariff tensions, wars, and fragile consumer confidence all creating a difficult environment for smartphone makers.

While some analysts believe the market is poised for recovery in the longer term, the short-term picture is defined by geopolitical risk and shifting consumer priorities, making premium feature differentiation even more important for brands hoping to sustain sales.