Smartphone Shipments to Plunge 12% in 2026 Amid Severe Memory Shortage

Global smartphone shipments grew 3.8 per cent in Q4 2025, extending the market's recovery to a fourth consecutive quarter and marking the strongest holiday quarter since 2021, with most regions posting YoY growth except China and Eastern Europe.

However, the market is set for a major reversal in 2026, according to Counterpoint Research, with shipments forecasted to decline 12.4 per cent YoY, marking the sharpest annual contraction ever.

The report expects memory shortages, rapid component price inflation, and structural vulnerabilities among lower‑end OEMs to not only drag down 2026 numbers but also extend the downturn through 2027, with a recovery expected only in late 2027 as additional memory capacity comes online.

"The impact is expected to continue through H2 2027, as it will take several quarters for memory supply expansion to materialise. Lower-end smartphones are likely to be affected the most, especially as LPDDR4 supply is shrinking faster than expected," said Principal Analyst Yang Wang.

OEMs are already responding with launch delays, streamlined portfolios, and specification trade-offs. We have also observed 10 per cent to 20 per cent price increases across some Android OEM portfolios in January 2026, he mentioned.

The current downturn is being shaped by deep structural imbalances across the memory supply chain, as manufacturers continue diverting wafer capacity toward higher‑margin AI‑focused DRAM and enterprise SSD NAND.

Not all parts of the market will be affected equally, and premium segments are expected to remain more resilient than the mass market and likely to grow in single digits, while the sub-$200 price segment is expected to decline by more than 20 per cent, said the report.

"Apple and Samsung are likely to weather the headwinds better due to stronger supply chain integration, higher pricing power, and continued premiumisation," said the report.

- IANS