Affordable AI Phones Are Fueling Smartphone Market Growth

A Surprising Twist in a Tough Market

Even with ongoing tariff volatility and global economic instability, the smartphone market is showing unexpected signs of life. New data from the International Data Corporation (IDC) reveals that smartphone shipments actually grew by 1% year-over-year in the second quarter of 2025. What's behind this uptick?

The AI Effect: Midrange Phones Lead the Charge

It seems consumer curiosity about Artificial Intelligence is the secret ingredient. The IDC report suggests that while demand for lower-end devices has been sluggish, phones that pack in new AI features are successfully luring customers back, as long as the price is right.

Samsung's Winning Strategy with Affordable AI

Leading the pack is Samsung, which has strengthened its market position thanks to its popular midrange models. Francisco Jeronimo, vice president for client devices at IDC, credits the company's "strong growth" to the new Galaxy A36 and A56 models. "These new products introduce AI-enabled features to midrange devices, which have been effectively used in retail stores to drive sales," he said.

For example, the Galaxy A36, starting at a reasonable $400, gives many people an affordable entry point to try out features like AI-enhanced photo editing and Google's handy Circle to Search.

What Do Consumers Really Want?

According to CNET mobile expert Mike Sorrentino, Samsung's Galaxy A line, along with Motorola's competing Moto G series, has successfully brought desirable features to lower-cost phones. This is a key strategy in a US market otherwise dominated by Apple. These devices are often made even more accessible through carrier subsidies, although this usually requires a multi-year commitment.

A recent CNET survey found that while only 11% of people upgrade specifically for AI features, it also highlighted that price is the single biggest motivator for 62% of buyers. This suggests that a midrange phone offering the latest AI buzzwords could be the perfect combination to convince someone it's time for an upgrade.