Smartphone Market Resilience: Apple and Samsung Thrive Amidst Component Shortages and AI Integration

The global smartphone market demonstrated surprising resilience in 2025, achieving growth despite significant headwinds including component shortages and macroeconomic uncertainties. Even as overall shipments faced challenges, premium brands like Apple and Samsung led the recovery, fueled by demand for innovative devices and the integration of artificial intelligence (AI) into more affordable models.

Market Growth and Challenges in 2025

Worldwide smartphone shipments increased by 3.5% year-over-year in the third quarter of 2025, reaching 325.7 million units [IDC]. For the full year, the market is projected to grow by 1.5% [IDC]. This growth occurred despite a challenging environment marked by economic uncertainty and fluctuating tariffs.

A significant factor impacting the market was a global memory shortage. This crisis disproportionately affected Android manufacturers, particularly those focused on low-end devices, putting pressure on their profit margins and potentially leading to increased consumer prices [9to5mac]. The average selling price (ASP) is expected to rise 14%, reaching an all-time high of $523 [Gizguide].

Apple and Samsung Lead the Way

Apple and Samsung emerged as the primary drivers of growth in the smartphone market. Apple achieved record shipments in the July quarter, driven by strong demand for the iPhone 17 lineup [IDC]. Pre-orders for the iPhone 17 surpassed those of previous generations. Samsung too posted its strongest July-quarter growth on record [IDC], boosted by sales of its Galaxy Z Fold 7 and affordable AI-enabled Galaxy A-Series devices [Gizguide].

Combined, Apple and Samsung’s market share expanded to 39%, up from 37% the previous year [Gizguide]. After over 14 years, Apple overtook Samsung as the top smartphone vendor globally [GSMarena].

The Rise of AI and Foldable Devices

The integration of AI capabilities into smartphones, particularly in more affordable price categories, played a crucial role in driving upgrades. The momentum in foldable devices also contributed to market growth [Gizguide].

Looking Ahead

While the memory shortage is expected to stabilize around mid-2026, prices are unlikely to return to previous levels. Smartphone shipments are projected to recover by 2% in 2026 and grow by 5.2% in 2028 [Gizguide]. The market is undergoing a structural reset, reshaping the total addressable market, supplier landscape, and product mix [Gizguide].