UBS survey warning: Replacement cycle extended to 2.6 years, the smartphone industry may face several years of low growth

While Wall Street is still painting a rosy picture of an AI-driven smartphone "super cycle," UBS's latest survey data has poured cold water on the market—global smartphone purchasing intentions are sharply declining, with Apple being the hardest hit.

According to news from the Chase Trading Desk, UBS released a survey report this week, which showed that among 7,500 consumers across five countries (the U.S., U.K., Germany, Japan, and China), the intention to purchase smartphones in the next 12 months has dropped from 39% in the fourth quarter of last year to 36%, remaining flat compared to the same period last year.

Among them, the collapse in the U.S. market is particularly noteworthy, with future purchasing intentions plummeting from an astonishing 50% in the fourth quarter to 37%, also down from last year's 44%. UBS analyst David Vogt pointed out in his report:

The sharp decline in future purchasing intentions in the U.S. market is especially noteworthy. Consumers may have released demand in advance of potential new tariffs.

Apple is the hardest hit, the iPhone halo is fading

At the same time, consumers' "upgrade procrastination" is becoming increasingly severe.

The data known as the "expected replacement cycle"—which indicates how long consumers plan to hold onto their phones before upgrading—has quietly extended from 29.7 months in the fourth quarter of last year to 31.1 months (approximately 2.59 years).

In this overall market cooling, Apple may feel the chill most directly.

The survey shows that the share of iPhone purchasing intentions for the next 12 months has dropped from 18% in the fourth quarter of last year to 14%.

In the crucial U.S. market, the decline is even more severe, falling sharply from 24% to 17%. In contrast, its main competitor Samsung's purchasing intentions have remained stable at around 9%.

Wall Street's AI "super cycle" fantasy is collapsing

For a long time, analysts have bet that generative AI would serve as a catalyst for consumers to accelerate their upgrades, but UBS's survey data has doused this optimism with cold water.

Although interest in smartphones with generative AI features has slightly increased from 16% in the fourth quarter of last year to 19%, this is far from enough to create the so-called "super cycle."

This weak interest is distributed extremely unevenly across the globe:

• The Chinese market's enthusiasm for AI phones reaches 78%, standing out prominently.
• In contrast, the interest level in the U.S. market is only 8%, almost negligible.
• Meanwhile, Japan even shows a negative net interest.

More critically, only 34% of respondents globally indicated that they would be willing to "pre-purchase or pay extra" for AI features. This clearly shows that, at least for now, smartphones with AI capabilities have not become a key enough factor to pry open consumers' wallets.

Pricing Paradox Under Tariff Shadows and the Future of Stagnant Growth

Despite weak demand, the report also reveals an interesting pricing paradox.

Among those respondents who indicated they might purchase a phone in the next 12 months, as many as 82% said they would accept some degree of price increase if smartphone manufacturers decided to raise prices to offset the cost pressures from tariffs on the bill of materials (BoM).

However, this does not change the overall situation. Taking all factors into account, UBS holds a pessimistic view on the market outlook for the coming years.

The report predicts that global smartphone shipments will achieve only about a 1% year-on-year weak growth in 2025, while 2026 will fall into a state of zero growth stagnation. As David Vogt emphasized at the end of the report:

We believe that investors expect that even if there is growth in smartphone shipments in the coming years, it will be minimal.

This is clearly not good news for Apple and the entire industry. The growth story has been told, and a new phase full of challenges has arrived