Global smartphone shipments set for record 12.4% drop in 2026 as memory crunch bites

Smartphones

• Global smartphone shipments to fall 12.4% YoY in 2026
• Memory shortages drive steepest annual decline since 2013
• Premium phones to grow, entry-level segment may shrink over 20%

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Global smartphone shipments ended 2025 on a modest high, with low single-digit year-on-year growth supported by improving macroeconomic conditions and a healthy holiday quarter. According to Counterpoint Research, shipments rose 3.8% YoY in Q4 2025, marking the strongest festive quarter since 2021. Most regions recorded growth, except China and Eastern Europe.

But the recovery may prove short-lived.

Counterpoint’s latest Smartphone Market Outlook Tracker forecasts a 12.4% YoY decline in 2026, the steepest annual contraction ever recorded. Global shipments are expected to fall below 1.1 billion units, levels not seen since 2013 when 4G adoption was still gathering pace.

Memory shortages at the heart of the crisis

Unlike previous downturns triggered by soft consumer demand, the 2026 slump is supply-led. The key pressure point is memory.

Mobile LPDDR4 and LPDDR5 prices in Q2 2026 are expected to be nearly three times higher than Q3 2025 levels. The shortage stems from wafer capacity being diverted to higher-margin AI-focused DRAM and enterprise SSD NAND, alongside prolonged under-investment after the post-pandemic correction.

Principal Analyst Yang Wang noted that the impact could last through the second half of 2027, as new capacity will take several quarters to come online. Lower-end smartphones are expected to be hit hardest, especially as LPDDR4 supply tightens faster than anticipated.

OEMs have already begun reacting. Launch delays, trimmed portfolios and specification trade-offs are becoming common. Some Android brands reportedly raised prices by 10% to 20% in January 2026.

Premium phones hold steady, entry-level devices suffer

The downturn will not affect all segments equally. Premium devices are forecast to grow in single digits, while the sub-$200 segment could shrink by more than 20%.

Industry leaders such as Apple and Samsung Electronics are expected to weather the storm better than smaller rivals. Their tighter supply chain control, pricing power and premium positioning provide insulation against component volatility. Carrier-led promotions and higher-income buyers should further support the premium tier.

Emerging markets, however, will feel the strain. Shipments in the Middle East and Africa are projected to decline 19%, with Latin America and Asia Pacific each forecast to drop 14%. Lower-end OEMs that depend heavily on these regions face rising component costs and limited room to increase prices without hurting demand.

Consolidation and longer upgrade cycles ahead

Counterpoint expects accelerated industry consolidation as weaker players struggle to cope. The market could become more concentrated, with higher average selling price floors, slimmer product portfolios and longer replacement cycles stretching well beyond four years.

At the same time, the second-hand smartphone market is likely to grow in 2026. Refurbished devices under $300 may become increasingly attractive as new phone prices rise.

If the forecast holds, the smartphone market’s next recovery will depend less on consumer sentiment and more on how quickly memory manufacturers can restore supply. Until then, 2026 could mark the industry’s most disruptive reset in over a decade.