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Smartphone industry to thrive in 2025 as 5G and AI drive demand

in Tech
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The smartphone market is poised for a strong 2025, driven by product portfolio refreshes among leading handset manufacturers, rising consumer interest in innovative artificial intelligence (AI) features, and growing demand for and increased affordability of 5G devices.

IDC’s five-year forecast for smartphone shipments worldwide by operating system shows that the smartphone market reached 1.21 billion units shipped in 2024, up 4.0% from 2023. According to IDC, sales of affordable Android smartphones are growing rapidly in emerging markets, while premium markets are embracing new AI features.

Here are some of the key trends to watch in 2025:

5G adoption accelerates throughout Africa

Throughout Africa, we have seen a surge in 5G investment, including spectrum auctions, pilots and commercial launches. With smartphone manufacturers leveraging the latest systems on chips (SoCs), we are also seeing more affordable 5G-ready smartphones hit the market. This has set the stage for accelerated 5G adoption across Africa in 2025. IDC forecasts 13.2% growth in global sales of 5G-powered devices in 2025, following near 16% growth in 2024. 

Generative AI fuels the next generation of smartphone innovation

Chipmakers like MediaTek are integrating next-generation generative AI features with their SoCs. Our Dimensity 9300 platform, for example, includes the MediaTek NPU 790 generative AI engine to allow faster, safer edge AI computing. This enables smartphone manufacturers like Xiaomi to create a range of innovative generative AI experiences.

Some examples of the features we can expect to become commonplace in smartphones include AI-generated subtitles for video calls, real-time translations of multiple languages and AI notetaking with summaries and proofreading. The productivity gains in classrooms, work and personal life will be enormous.

IDC forecasts that AI-powered devices will be the fastest-growing segment in the smartphone category. Growth in 2025 is expected to hit 73%. By 2028, worldwide gen AI smartphone shipments will reach 912 million units, representing a compound annual growth rate (CAGR) of 78.4% for 2023-2028. 

AI-driven cameras and displays

Integrated AI features will continue to enhance smartphone camera and display experiences. On-device AI Image Signal Processing, AI Noise Reduction, AI processing on RAW photos and videos, and other utilities like real-time bokeh tracking are rapidly trickling down to mainstream smartphones.

Focus on security

Smartphone security is a key concern because of the sensitive information stored on our devices, such as biometrics and financial data. AI-powered security tools and theft detection features are crucial for protecting this information and keeping our data away from prying eyes. The Dimensity 9300, for instance, includes a privacy-focused design that resists physical attacks on data access by protecting important processes during boot-up and when performing secure computing.

 Enhanced photography

We can expect 2025 to be the year the new Ultra HDR format really takes off. Ultra HDR is a big step forward for mobile photography, making photos look much more vibrant while ensuring that files are compatible with the universally supported JPEG format. Chipsets like the MediaTek Dimensity 9300 are revolutionizing photography and videography, thanks to support for the new Ultra HDR format and always-on HDR recording at up to 4K resolution at 60 frames per second (fps).

 Closing the gaming performance gap

The latest SoCs feature power-efficient graphics processing to give gamers full raytracing experiences at a smooth 60 frames per second and console-grade global illumination effects. We are seeing near home-console or PC levels of fidelity and performance emerge on a device you can carry in your pocket.  The MediaTek Dimensity 9300’s GPU, for instance, provides 46% higher peak performance with 40% power savings, leading to longer battery life and game times.

Conclusion

The smartphone market is set for robust growth in 2025, driven by technological advancements and evolving consumer needs. At MediaTek, we aim to play a critical role in the adoption of next-generation technology, empowering manufacturers like Xiaomi to deliver innovative features such as cutting-edge generative AI functionalities at an affordable cost.

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