Smartphones make a comeback but 2025 will be about balanceSmartphones make a comeback but 2025 will be about balance

So claims Canalys, which published its latest smartphone shipment statistics this week. The data showed that worldwide shipments came in at 1.22 billion in 2024, an increase of 7% on the previous year and the first annual market growth figure since 2021 (see chart below).

The big two, Apple and Samsung, both posted shipment declines of 1% year-on-year, but retained their first and second positions respectively. Indeed, together they accounted for 36% of the market last year, with Apple shipping just 3 million more devices than its South Korean rival at 225.9 million.

"2024 has been a comeback year for the smartphone industry, delivering the highest annual global shipment volume post-pandemic," said Canalys analyst Runar Bjørhovde. "Demand has been soaring in the mass-market segment, driven by a refresh cycle of pandemic-bought smartphones alongside channel replenishments."

But alongside the optimism comes a heavy note of caution: the current year will not necessarily be an easy ride.

"Vendors are facing a tricky 2025 with mounting complexities both globally and regionally," said Bjørhovde. "Emerging markets have been the industry's growth engine in 2024, but growth has slowed down as some markets are reaching a point of saturation."

Although emerging markets drove shipment growth last year, it's worth pointing out that mature economies also reported recoveries. Europe witnessed 3% shipment growth and North America 1%, while mainland China grew by 4%. Demand in those markets came on the back of promotional activities from vendors, including discounts, trade-ins and device bundles, Canalys said.

The analyst firm also echoed comments made by its peers IDC and Counterpoint Research last month regarding the impact of the smartphone subsidy scheme in China. The scheme applies government subsidies to many smartphones, tablets, smart bands and smartwatches; customers purchasing a device priced at under 6,000 yuan (just over US$800) benefit from a subsidy of 15%, capped at CNY500 per product.

That will naturally drive market growth both in China and worldwide. China is a huge part of the whole, after all, shipping 285 million smartphone units in 2024, according to Canalys data published a few weeks ago.

In addition, the growing premiumization trend, to use Canalys' own expression, and evolving financing models will also bring growth potential to the handset makers in 2025.

However, the analyst firm also highlights economic fluctuations, potential US tariffs and compliance requirements as adding unpredictability to market dynamics.

"In 2025, vendors will prioritize ASP [average selling prices] and profitability growth across segments while strengthening their market presence through diversified product portfolios, brand-driven marketing, and deeper channel collaborations," predicted Bjørhovde. "The ability to navigate these challenges while capitalizing on emerging opportunities will define the leaders of the next phase of industry evolution."

The way things stand, the big two look pretty secure at the top of the market and Xiaomi remains in third place, a position it has consolidated thanks to 15% shipment growth to 168.6 million units increasing its market share to 14%. Its growth was driven by sales in mainland China and emerging markets. Transsion rose to fourth place for the first time, switching spots with Oppo.

These companies have a plenty of growth opportunities in front of them in the coming year, but they will need to get their strategies right.