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Joy Agwunobi
At a time when inflationary pressures continue to squeeze household budgets across much of the world, one spending decision appears to defy economic logic. Consumers are still upgrading their smartphones, even as device prices climb steadily higher.
Global smartphone shipments grew by 2 percent year-on-year in 2025, marking a second consecutive year of expansion, according to preliminary estimates from Counterpoint Research. While the growth rate looks modest on the surface, its composition tells a more revealing story. Momentum is increasingly coming from emerging regions, particularly the Middle East and Africa (MEA), where consumers are not just buying more phones but opting for smarter, more capable, and often more expensive devices.
In MEA, this trend reflects a deeper shift in how smartphones are perceived. They are no longer replaceable consumer electronics, but long-term tools for economic participation, communication, and digital identity.
Smartphones as essential infrastructure
Across many MEA markets, the smartphone is the primary, and often only, computing device consumers own. It functions as a wallet, an office, a marketplace, and a gateway to essential services. From mobile banking and e-commerce to ride-hailing, content creation, healthcare access, and remote work, daily economic activity increasingly flows through handheld screens.
As dependence deepens, tolerance for underperforming devices is shrinking. Poor battery life, limited storage, sluggish performance, or delayed software updates are no longer minor inconveniences. For small business owners, gig workers, and digital entrepreneurs, these limitations can translate directly into lost income.
This reality is reshaping purchasing behaviour. Instead of cycling through cheaper phones more frequently, consumers are increasingly willing to pay more upfront for devices that promise stronger performance, longer usability, and compatibility with future technologies. Higher-end smartphones are being treated less as indulgences and more as investments.
This shift has been a major driver of what analysts describe as “premiumisation.” Counterpoint notes that premium and near-premium devices accounted for much of the market’s growth in 2025, supported by aggressive marketing and the wider availability of financing options.
“In 2025, the smartphone market continued its gradual shift toward higher price tiers, driven by consumers upgrading to premium devices,” said Shilpi Jain, senior analyst at Counterpoint Research, while also adding “At the same time, demand for 5G handsets rose sharply across developing regions.”
The quiet pull of 5G
While 5G was once marketed as a headline feature, it is now becoming an underlying expectation. In emerging markets across the Middle East, Africa, and parts of Asia-Pacific, consumers are increasingly choosing 5G-capable devices even when network coverage remains uneven.
The logic is simple. A phone purchased today is expected to last three to five years. Consumers want assurance that their devices will remain relevant as 5G networks expand, rather than being forced into another upgrade cycle sooner than planned.
This forward-looking behaviour has helped offset weaker demand in more mature markets, where replacement cycles are longer and innovation feels incremental. Counterpoint noted that regions such as Japan, the Middle East, and Africa played a key role in sustaining global shipment growth in 2025.
Financing makes premium feel affordable
Another factor reshaping buying decisions is the growing availability of financing and instalment plans. Instead of confronting the full cost of a premium phone upfront, consumers are spreading payments over several months, making higher-end devices psychologically and financially easier to justify.
This has been particularly impactful in emerging markets, where financing is narrowing the gap between aspiration and affordability. As a result, mid-range phones with premium features and entry-level flagship devices are seeing strong demand.
The effect is a blurring of traditional price segments. The distinction between mid-range and premium is no longer as rigid, as consumers prioritise value over absolute price.
Apple, Samsung, and the power of replacement cycles
At the top end of the market, Apple emerged as the biggest beneficiary of these trends in 2025. The company led the global smartphone market with a 20 percent share and recorded 10 percent year-on-year shipment growth, the strongest among the top five brands.
According to Counterpoint, Apple’s performance was fuelled by rising demand in emerging and mid-sized markets, alongside strong traction for the iPhone 17 series in the fourth quarter. At the same time, older models such as the iPhone 16 continued to perform well in markets like Japan, India, and Southeast Asia.
This dual momentum reflects another powerful driver of upgrades: the COVID-era replacement cycle. Millions of consumers who delayed upgrades during the pandemic years are now reaching a point where replacement is no longer optional.
Samsung, which finished 2025 with a 19 percent market share, benefited from a similar dynamic but with a broader spread across price points. Growth was driven largely by the Galaxy A series in the mid-range segment, while premium devices such as the Galaxy Fold7 and S25 series outperformed their predecessors.
Despite facing pressure in Western Europe and Latin America, Samsung’s strong showing in Japan and stable performance in core markets helped sustain its overall growth.
Affordable premium reshapes competition
Beyond the top two players, brands like Xiaomi and vivo have leaned heavily into premiumisation strategies tailored to emerging markets. Xiaomi retained its third-place position globally, supported by a balanced mix of flagship and mid-tier devices, strong execution in Latin America and the Middle East and Africa, and disciplined channel management.
vivo, which recorded 3 percent year-on-year growth, benefited from strong offline execution in India and a streamlined product portfolio designed to capture both high-value upgrades and resilient mid-tier demand.
These strategies highlight a broader industry reality; consumers may be price-conscious, but they are not feature-averse. Many are willing to pay more, within reason, for devices that feel meaningfully better and more future-ready.
The road ahead may test resilience
Looking ahead, however, the willingness of consumers to absorb higher prices may be tested. Counterpoint expects the global smartphone market to soften in 2026 as component costs rise, driven by DRAM and NAND shortages and the growing prioritisation of AI data centres by chipmakers.
Price increases are already beginning to surface, and shipment forecasts for 2026 have been revised downward by 3 percent. While Apple and Samsung are expected to remain relatively resilient due to stronger supply chain capabilities and premium positioning, Chinese manufacturers concentrated in lower-price segments may face greater pressure.
Nevertheless even in a tighter environment, the underlying shift in consumer behaviour is unlikely to reverse entirely. Smartphones have become long-term personal assets, and buyers are increasingly treating upgrades as strategic decisions rather than impulse purchases.
For many consumers, paying more upfront is no longer about owning the most expensive phone, but about owning the right one—one that will last longer, work faster, and remain relevant in a more connected, digital-first world.
