China Galaxy Securities (CGS) released a research report stating that in 2025, the global consumer electronics market is advancing amid a "structural divergence" characterized by slowing growth in traditional categories and the rise of new drivers like AI. AI-powered devices such as AI smartphones, AI PCs, and AI glasses are accelerating their market entry, shifting industry competition from single-product comparisons to ecosystem development centered on seamless user experiences.
In the short to medium term, the industry will likely continue facing both opportunities and challenges. While AI innovation deepens and the rollout of edge-AI devices brings relatively certain growth prospects, rising costs due to memory chip shortages pose significant challenges.
Key industry data highlights: 1) **Smartphones**: Global shipments reached 323 million units in Q3 2025, up 2.6% YoY. China’s smartphone market saw a slight 0.5% decline to 69 million units. Despite a modest recovery globally, China experienced minor adjustments, with AI and foldable-screen innovations remaining key drivers for premium upgrades. 2) **PCs**: Global PC shipments rose 9.4% YoY to 76 million units in Q3 2025. Microsoft’s discontinuation of Windows 10 support remains a critical growth factor, with replacement demand expected to persist due to the transition to AI PCs. 3) **Tablets**: Global tablet shipments grew 5.1% YoY to 40.041 million units, marking seven consecutive quarters of growth. 4) **Wearable Watches**: Shipments remained stable at 54.6 million units (+3% YoY), but average selling prices surged 9%, signaling accelerated premiumization.
Industry developments: 1) **Foldables**: Samsung launched its first tri-fold smartphone, the Galaxy Z TriFold, on December 2, while Huawei debuted its latest foldable flagship, the Mate X7, on December 11. 2) **AI/AR Glasses**: Alibaba’s Quark AI Glasses S1 began presales on October 24, with shipments starting in early December. Li Auto unveiled its breakthrough AI glasses, Livis, on December 3, and Google showcased its prototype with NanoBanana image-editing capabilities on December 9.
Sector performance: - Over one month, the consumer electronics index outperformed the CSI 300 by 0.74 percentage points but lagged behind the broader electronics index by 1.60 points. Specifically, the consumer electronics index fell 2.08%, while electronics dipped 0.48% and the CSI 300 declined 2.82%. - Over one year, the consumer electronics index surged 35.28%, beating the CSI 300 by 20.93 points but trailing the electronics index (38.37%) by 3.09 points.
Risks: Potential setbacks in AI development, slower-than-expected AI adoption, and delays in technological iterations or product certifications.
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