Investing.com -- Smartphone shipments continue to struggle in early 2025, with weak demand in China, chaotic global consumer sentiment, and a lack of compelling new features weighing on the market, according to Loop Capital.
“Smartphone fortunes continue to underperform as we embark(ed) on the 2025 landscape,” analysts wrote, adding that aggressive government subsidies in China have had “nominally positive” effects.
Despite these efforts, Loop Capital sees “scant evidence of any meaningful unit upside in 1H 2025 in China YoY”.
Looking ahead, the firm notes that AI integration could play a key role in a potential recovery, particularly in the second half of the year.
“We see all Chinese carriers embedding DeepSeek on all models from mid-2025 onwards,” said Loop, noting that Apple (NASDAQ:AAPL) faces pressure to improve Siri’s AI capabilities.
However, Loop Capital remains skeptical about Apple’s ability to deliver a seamless AI experience in September 2025.
Another potential driver of growth is said to be increased memory capacity across smartphones.
Loop Capital highlights that Chinese Android models are looking to upside to as much as 16G, while “current plans for the iPhone 17 family call for 8GB maximum,” said the firm.
“Plans for 12GB are again being debated,” they added. Loop Capital believes that Apple’s foldable iPhones could shift to 12-16GB memory configurations.
Analysts note that Apple’s past attempts at differentiation with mini and plus models were not well received, but test groups have responded favorably to the thinner Air version.
Despite hopes for a late-2025 recovery, component suppliers are said to remain under pressure, navigating AI requirements, modem changes, and battery life challenges.