Apple Faces Steep Challenges in 2025: Lower-Than-Expected iPhone Shipments and eSIM as a Key Hurdle

Apple Faces Steep Challenges in 2025: Lower-Than-Expected iPhone Shipments and eSIM as a Key HurdleTF International Securities analyst Ming-Chi Kuo recently issued a research report expressing cautious optimism about Apple's market performance in 2025. The report predicts iPhone shipments between 220 and 225 million units in 2025, representing an 8% to 10% decline from previous expectations

Apple Faces Steep Challenges in 2025: Lower-Than-Expected iPhone Shipments and eSIM as a Key Hurdle

TF International Securities analyst Ming-Chi Kuo recently issued a research report expressing cautious optimism about Apple's market performance in 2025. The report predicts iPhone shipments between 220 and 225 million units in 2025, representing an 8% to 10% decline from previous expectations. This forecast suggests Apple will face significantly tougher challenges in the global smartphone market, with its growth momentum potentially slowing substantially.

The report notes that while the overall Chinese smartphone market saw virtually flat year-on-year shipments in December 2024, iPhone shipments declined by approximately 10% to 12%, indicating a further shrinkage of Apple's market share in China. Even the anticipated launch of the iPhone SE4 in mid-2025 is unlikely to reverse this trend. Kuo predicts that even with the new model, iPhone shipments in the first half of 2025 will still drop by about 6% year-on-year.

This downward trend stems from a confluence of market factors. Persistent global economic headwinds have dampened consumer confidence, reducing the willingness to purchase high-end smartphones. Meanwhile, competition from the Android camp is intensifying, with more competitively priced Android phones eroding Apple's market share.

Of particular concern, Kuo highlights that two new iPhone models planned for the second half of 2025an ultra-thin iPhone (approximately 5.5mm at its thinnest point) and a foldable iPhonemay face significant market resistance. Their pursuit of extreme thinness could necessitate exclusive reliance on eSIM, a factor that could severely limit sales.

Currently, eSIM-only phones haven't gained widespread adoption in the Chinese market. Consumer reliance on physical SIM cards remains high, putting eSIM-only devices at a significant disadvantage. Unless Apple alters the design of these two models, their shipments could face considerable challenges and fall far short of expectations.

To counter declining sales, Apple has already begun implementing a proactive price reduction strategy. From January 4th to 7th, 2025, Apple held a "New Year Promotion," offering discounts up to 800 RMB on select products with eligible payment methods and trade-in credits for new iPhones. This promotion reflects Apple's proactive response to market challenges, attempting to stimulate sales through price adjustments.

However, price cuts are not a long-term solution. Apple needs to identify new growth drivers to maintain its leading position in future market competition. This includes, but is not limited to, developing more innovative products, enhancing user experience, strengthening brand marketing, and expanding into new markets.

Kuo's report serves as a wake-up call for Apple. While remaining a giant in the global smartphone market, its position is not unassailable. Facing increasingly fierce competition and a rapidly evolving market environment, Apple must proactively address these challenges to retain its leading position.

The report's predictions regarding eSIM are particularly noteworthy. While eSIM technology offers advantages such as portability, security, and flexibility, its widespread adoption still faces many hurdles. Consumer awareness and acceptance of eSIM technology remain low, requiring concerted efforts from Apple and the industry to increase awareness and alleviate consumer concerns.

Furthermore, Apple needs to closely monitor the dynamics of the Chinese market and adapt its product strategy accordingly. China is one of the world's largest smartphone markets and is crucial to Apple's global performance. Failure to succeed in China would severely impact Apple's global strategy.

In conclusion, Apple's market challenges in 2025 are substantial. The predicted decline in iPhone shipments and the potential risks associated with eSIM technology indicate that Apple needs a more proactive strategy to navigate future market competition and maintain its leading position in the global smartphone market. Whether Apple can overcome these challenges will largely determine its future trajectory, impacting not only iPhone sales but also the success of its entire ecosystem and future strategy.