Barclays raises smartphone unit growth, sees a modest performance for iPhones

Published 11/09/2025, 14:08

Investing.com -- Barclays has nudged up its global smartphone forecast, now expecting unit growth of about 1% in 2025, compared with a previously flat outlook.

The bank trimmed its 2026 forecast to 1% growth from 2%, citing muted consumer demand, but said tariff impacts had proved less severe than feared.

Overall, it continues to expect low single-digit growth across 2025–2027.

The latest update follows second-quarter shipments of 296 million units, up 0.8% from a year earlier, helped by some pull-in and stronger-than-expected demand. Still, analyst Tim Long pointed to ongoing macro uncertainty and tariffs as factors limiting visibility, keeping forecasts capped at low single digits.

“We continue to expect a modest performance for iPhones, though acknowledge tariff impacts have been more muted than originally expected,” Long said.

Apple remains a key focus in the forecast. Long voiced caution over the upcoming iPhone 17 cycle, saying elevated prices may lift average selling prices (ASPs) but could weigh on unit volumes. The lack of new, differentiating features in recent models also tempers expectations.

“Apple hasn’t introduced any new groundbreaking features in recent iPhone models, but is still offering devices with increased prices, which likely means improved ASPs but more risk to units,” the analyst wrote.

In China, smartphone shipments grew 6% in 2024 but are expected to slow to 2% in 2025 and 1% in the two years after. Replacement rates are projected to remain high through 2027, with consumers holding onto devices for roughly four years, up from three before the pandemic.

Chinese brands, including Xiaomi, Oppo, Vivo, and Shenzhen Honor Electronic Co Ltd (SZ:300870), are forecast to maintain close to 50% of the market.

Barclays rates Apple Underweight with a $180 price target, citing its premium valuation, lack of clarity on AI strategy, and a lackluster iPhone 16 cycle. The bank remains skeptical of significant upside from hardware or services growth over the medium term.

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