China Galaxy Securities: AI empowers the consumer electronics market, and the trend of high-end wearable watches is obvious

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that in 2025, the global consumer electronics market is moving forward in the “structural differentiation” of slowing growth in traditional categories and the rise of new momentum represented by AI, and new forms of devices such as AI phones, AIPC, and AI glasses will be implemented at an accelerated pace, and industry competition will shift from a single product competition to an ecological structure centered on full-scene experience. In the short to medium term, the industry may continue the situation where opportunities and challenges coexist. AI innovation continues to deepen, and the acceleration of new end-side AI product launches brings more certainty and industry opportunities to enterprises, but the rise in costs caused by memory chips will also bring significant challenges.

The main views of China Galaxy Securities are as follows:

Industry data tracking

1) Mobile phones: In Q3 2025, global smartphone shipments were about 323 million units, an increase of 2.6% over the previous year. In Q3 2025, the Chinese smartphone market shipped about 69 million units, a slight decrease of 0.5% over the previous year. Overall, in the third quarter of 2025, the global market recovered, but there was a slight adjustment in the Chinese market. Innovative technologies such as AI and folding screens are still the core driving high-end switches. 2) PC: In the third quarter of 2025, global PC shipments increased 9.4% year-on-year to 76 million units. Microsoft's discontinuation of support for Windows 10 remains a key factor in market growth. Looking ahead, the wave of switches brought about by the shutdown of Windows 10 and the transition to AIPC will continue. 3) Tablets: In the third quarter of 2025, global tablet shipments reached 400,041 thousand units, an increase of 5.1% over the previous year, achieving seven consecutive quarters of increase in shipments. 4) Wearable watches: In the third quarter of 2025, global wearable watch shipments remained relatively stable, with a year-on-year increase of 3% to 54.6 million units. However, from a price perspective, the market showed a significant “stable volume and price increase” trend this quarter. The average selling price rose 9% year on year, indicating that the market is accelerating its transformation to high-end.

Industry news

1) Folding screen: On December 2, 2025, Samsung Electronics held a global press conference in Seoul, South Korea to officially launch the first three-folding screen phone, the Galaxy ZTrifold. On December 11, Huawei released a new generation folding screen flagship, the Huawei MateX7. 2) AI/AR glasses: On October 24, Alibaba's Quark AI glasses S1 officially began pre-sale on major e-commerce platforms, and the products will be shipped one after another in early December. On December 3, 2025, at the “Ideal Technology Day” press conference, Ideal Auto officially launched its most groundbreaking smart terminal product, LiVis Ideal AI glasses. On December 9, the Google AI Glasses prototype used Google's NanoBanana image editing capabilities for the first time.

Section tracking

1) Consumer electronics index performance in the past month: Judging from the level of rise and fall, the consumer electronics industry index outperformed the Shanghai and Shenzhen 300 index by 0.74 percentage points and outperformed the electronics index by 1.60 percentage points. Judging from specific data, the consumer electronics industry index rose and fell -2.08%, the electronics industry index rose and fell -0.48%, and the Shanghai and Shenzhen 300 index rose and fell -2.82%. 2) Consumer electronics index performance in the past year: Judging from the level of rise and fall, the consumer electronics industry index outperformed the Shanghai and Shenzhen 300 Index by 20.93 percentage points and outperformed the electronics index by 3.09 percentage points. Judging from specific data, the consumer electronics industry index rose and fell 35.28%, the electronics industry index rose and fell 38.37%, and the Shanghai and Shenzhen 300 index rose and fell 14.35%.

Risk warning: Risk of AI development falling short of expectations; risk of AI penetration falling short of expectations; risk of technology iteration and product certification falling short of expectations.