
Apple Faces Challenges Ahead: Declining iPhone Growth Predicted for 2025
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Apple’s 2025 outlook appears to be clouded by challenges, as Ming-Chi Kuo, a well-known analyst at TF International Securities, predicts a dip in iPhone shipments. Despite Apple’s reputation for innovation and market dominance, slowing growth in key markets like China and a lack of compelling upgrades may impact the company’s bottom line.
iPhone Shipments: Falling Short of Expectations
Kuo projects that iPhone shipments in 2025 could fall 8–10% below market consensus, with estimated sales of 220–225 million units, compared to the expected 240 million.
A few key factors are contributing to this slowdown:
- Stagnant Growth in 1H25: Shipments for the first half of 2025 are expected to decline by about 6% year-over-year (YoY), despite the anticipated launch of the iPhone SE4.
- China Market Decline: While China’s overall smartphone market remains stable, iPhone shipments reportedly dropped 10–12% YoY in December 2024, reflecting a continued erosion of Apple’s market share.
- Unimpressive iPhone 17 Air: Although the rumored iPhone 17 Air may perform better than the iPhone Plus, Kuo doesn’t foresee it driving significant growth due to downgraded components, high pricing, and an uninspiring user experience.
What About Apple Intelligence?
Apple Intelligence, a highly anticipated feature unveiled at WWDC, doesn’t appear to be the game-changer many hoped it would be. According to Kuo:
- No Impact on Hardware Upgrades: Unlike cloud-based AI services, Apple Intelligence has not spurred iPhone replacements or hardware upgrades.
- Minimal Boost to Services Revenue: Despite the initial buzz, interest in Apple Intelligence has significantly declined, leaving little impact on Apple’s services business.
iPhone SE4: A Glimmer of Hope?
The iPhone SE4, expected to launch in the first half of 2025, could bring some excitement to Apple’s lineup. However, even with this new model, Kuo predicts that 1H25 shipments will remain weak due to a combination of factors, including tariff-related front-loading in January and expected declines in the second quarter.
Looking Ahead
Kuo’s report paints a cautious picture for Apple’s iPhone business in 2025. With challenges in China, a lukewarm reception to the iPhone 17 Air, and limited impact from Apple Intelligence, the company may need to rethink its strategy to regain momentum.
That said, Apple has faced hurdles before and often responded with innovations that redefined the industry. While 2025 may present difficulties, it’s still possible that Apple has something up its sleeve to surprise us all.
Final Thoughts
The coming year will be an important one for Apple as it navigates a challenging market environment. Whether it’s through refreshed designs, breakthrough features, or new product categories, Apple will need to find ways to reinvigorate its growth story.