Smartphone market set for biggest-ever decline in 2026

As per the tech analysts, the global smartphone market is poised to suffer its biggest decline ever in 2026, sinking to a more-than-decade low in shipments, as surging memory chip prices drive up device costs, the International Data Corporation said on Thursday.

Smartphone shipments are expected to drop 12.9% to 1.12 billion units, the research firm said in a report.

The decline will hit low-end Android manufacturers the hardest, while Apple and Samsung are positioned to gain market share as smaller rivals struggle or exit the market entirely, the report said.

"What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain," said Francisco Jeronimo, vice president for Worldwide Client Devices at IDC.

A rapid build-out of AI infrastructure by tech firms such as Meta, Google and Microsoft has captured much of the memory chips supply, lifting prices as manufacturers prioritize components for higher-margin data centers over consumer devices.

Memory chips, or DRAM, are crucial to smartphones as they allow power-hungry applications to run smoothly.

Analysts have said rising component costs will force budget-device focused companies to pass the expenses on to consumers, just as demand at higher price points is weakening.

Apple and Samsung, with stronger balance sheets and premium positioning, are better positioned, IDC said.

It expects the average selling price of smartphones to surge 14% to a record $523 this year, as manufacturers shift toward higher-margin models to offset ballooning costs.

IDC expects a modest 2% recovery in 2027 as the crisis eases, followed by a 5.2% rebound in 2028, though it said that the market was unlikely to return to previous norms.

"The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market," said Nabila Popal, senior research director at IDC's Mobile Phone Tracker.

She warned that the sub-$100 smartphone segment, representing 171 million devices, will become "permanently uneconomical" even after memory prices stabilize by mid-2027.

Experts weigh if smartphone manufacturers cater these concerns by next year to survive the competitive race.