NEW DELHI — Global smartphone shipments are projected to contract sharply in 2026 as a worsening memory supply crunch disrupts production and drives up component costs, according to a report released Friday by Counterpoint Research.
The industry closed 2025 on a relatively stable note, posting low single-digit annual growth supported by improving macroeconomic conditions and solid holiday demand. Shipments rose 3.8 percent year over year in the fourth quarter, marking the fourth consecutive quarter of recovery and the strongest holiday performance since 2021. Most regions recorded growth, with the exception of China and Eastern Europe.
However, analysts expect a significant reversal in 2026. Counterpoint Research forecasts a 12.4 percent year-over-year decline in global smartphone shipments next year — potentially the steepest annual contraction on record.
The downturn is being driven by severe supply-side constraints in the memory market, rapid component price inflation and structural weaknesses among lower-end original equipment manufacturers (OEMs). The report warns that the pressure could persist through 2027, with recovery likely only in late 2027 as additional memory production 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.
Manufacturers have already begun adjusting to the tightening environment. According to the report, several Android OEMs implemented price increases of 10 percent to 20 percent across portions of their portfolios in January 2026. Companies are also delaying product launches, streamlining device lineups and making specification trade-offs to manage costs.
The current imbalance stems from memory producers reallocating wafer capacity toward higher-margin AI-focused DRAM and enterprise SSD NAND, limiting supply available for consumer electronics such as smartphones.
The impact is expected to be uneven across market segments. Premium devices are projected to remain relatively resilient and could still post low single-digit growth. In contrast, the sub-$200 segment is forecast to decline by more than 20 percent as cost pressures hit price-sensitive buyers hardest.
The report noted that major players such as Apple and Samsung are better positioned to navigate the turbulence due to stronger supply chain integration, greater pricing power and a continued shift toward premium devices. (Source: IANS)
