iPhone 17 Demand Is Breaking Records, But Some Troubles Are Ahead

The analysts at IDC have praised the iPhone 17 series for its role in driving Apple's record-breaking year and its impact on the entire smartphone market in a new report. The firm also warned that some troubles lie ahead next year, and they'll impact both Apple and Android vendors. The iPhone maker will not release a standard iPhone 18 model next year, while memory component shortages will impact smartphone prices in 2026.

Global smartphone sales will grow 1.5% this year, reaching 1.25 billion units, according to IDC. That's a revised forecast from the previous 1% growth expected for the year. The report notes that "accelerated performance" from Apple in the holiday quarter is the main reason for the increase. iPhone shipments should grow 6.1% in 2025 compared to last year, "up sharply" from the 3.9% growth in the previous cycle. Put differently, Apple should ship over 247 million iPhone units this year, enough to give it a record year in 2025. IDC senior research director Nabila Popal said the "phenomenal success of its latest iPhone 17 series" is the reason why Apple is seeing such momentum.

"In China, Apple's largest market, massive demand for iPhone 17 has significantly accelerated Apple's performance," Popal said in a statement, praising Apple's performance. "It ranked first in October and November per IDC's China Monthly Sales data with more than 20% share, miles ahead of the competition, leading IDC to revise Apple's Q4 forecast in China from 9% to 17% YoY. This turns a previously projected 1% decline in China for 2025 into a positive 3% growth, that's a phenomenal turnaround. The success story is replicated across all regions, including the U.S. and Western Europe that had previously slowed down. This calendar year will not only be a record period for Apple in terms of shipments but also in value, which is forecast to exceed $261 billion, with 7.2% YoY growth in 2025."

However, Apple won't experience the same growth next year, with IDC citing two reasons: component shortages and the big change Apple is preparing for the iPhone 18 lineup. Apple won't launch a base iPhone next September, pushing the handset to 2027 instead. This strategic change will impact iPhone sales directly, with Apple expected to sell 4.2% fewer iPhones next year than in 2025. Previous reports have also mentioned the strategy change for the iPhone 18 series. Apple should unveil only three phones next September: the iPhone 18 Pro, iPhone 18 Pro Max, and iPhone Fold. That said, Apple should see 5.4% growth in 2027, according to IDC's projections.

The entire smartphone market will shrink by 0.9% next year, with IDC citing the ongoing global memory shortage as a primary reason. The analysts say that low-to-mid range Android phones are more likely to see price hikes related to the component shortages. IDC also expects some vendors to adjust their portfolios toward more expensive models, as the higher margins help absorb some of the increased cost associated with memory chips. While the IDC doesn't offer examples, a recent report from Korea has shown that even Samsung is struggling to secure memory chips, with its semiconductor subsidiary preferring to sell RAM to AI firms rather than extend longer contracts to Samsung's mobile division. This could directly impact the price of some of the three Galaxy S26 models Samsung is expected to launch next February.

"Next year will be a challenging time for the industry; however, IDC still believes the market could see record ASPs," IDC research director Anthony Scarsella said in a statement. The ASP, or the average selling price, of a smartphone is projected to increase to $465 next year. Even though IDC expects the smartphone market to shrink by 0.9% in 2026, the higher ASP will propel the market to $578.9 billion, a record value for the industry. Sales will pick up significantly in 2027, with IDC projecting a 3% increase for the entire smartphone sector.