Tim Robberts
Investment firm Jefferies cut its smartphone volume estimates for the 2025 to 2027 time frame, as it believes the outlook has deteriorated for a number of reasons.
“U.S. tariff policy has created high [uncertainties], but drove pull-in demand in 2Q25,” analysts at the firm wrote in a note to clients. “That will leave 2H25 even more challenging, given still lack of innovations; uncertain economic outlook; high Android inventories; and fading subsidies in China.”
As such, the firm cut its 2025 to 2027 estimates between 2% and 4% overall.
Despite the shaky overall picture for smartphones, Jefferies said it raised its volume for Apple (NASDAQ:AAPL) iPhones by 4%, citing pull-in demand and 6.18 discounts in China, which lasted six weeks instead of the normal five.
“Our industry checks suggest smartphone [volume] during the latest 618 grew by ~4% YoY, weaker than ~6% last year,” Jefferies analysts wrote. “More importantly, AAPL offered smart and highly targeted discounts during 618, driving iPhone’s vol growth during 618 at 19% YoY, massively above the 7% growth last year. That has also driven the quarter-to-date growth in China to ~10%. Before 618, our industry checks showed iPhone’s volume was down by ~9% YoY, but strong 618 performance has driven its YTD growth to become largely flat.”
Conversely, Android devices saw minimal growth during the 618 shopping holiday in China, as Android and Huawei shipments only grew 1% year-over-year, with Android likely down 4% year-over-year.
“Given Android’s high inventory before 618 (~50 days), we believe poor 618 sales despite heavy discounts mean still high inventories and thus ongoing pressure to discount in 2H25,” the analysts explained. “Our industry checks also indicate Android’s overseas inventories are even higher than in China. Hence, Android’s poor outlook is the key driver of our global vol downgrade. We have also cut our 5G forecasts, driven all by Android.”