IDC says the global smartphone industry will face its biggest decline in 2026. Shipments may fall to the lowest level in more than ten years. Rising memory chip prices are driving this slowdown. Higher chip costs are increasing overall device prices.
Shipments to Drop Sharply
IDC expects smartphone shipments to fall 12.9% to about 1.12 billion units. Budget Android brands will suffer the most. Many smaller companies may struggle to survive. Some could exit the market completely.
Meanwhile, Apple and Samsung may gain market share. Their strong brand value and loyal customers give them an advantage.
Memory Supply Chain Shock
Francisco Jeronimo, IDC’s Vice President for Worldwide Client Devices, called this crisis a “tsunami-like shock.” He said the problem comes directly from the memory supply chain.
Tech giants such as Meta, Google, and Microsoft are expanding AI infrastructure quickly. They are buying large amounts of memory chips. Manufacturers now prioritize high-margin data centers over smartphones. This shift has pushed chip prices higher.
Memory chips, especially DRAM, play a key role in smartphones. They help apps run smoothly and support heavy multitasking.
Budget Phones Under Pressure
Rising component costs are hurting affordable smartphone makers. These companies will likely pass extra costs to consumers. At the same time, demand for expensive phones is weakening.
Apple and Samsung remain in a stronger position. Their premium models and solid finances help them manage rising costs better than smaller rivals.
Smartphone Prices to Hit Record High
IDC predicts that the average smartphone price will rise 14% this year. It may reach a record $523. Companies are focusing on high-margin models to protect profits.
Slow Recovery Ahead
IDC expects only a 2% recovery in 2027. Growth may improve to 5.2% in 2028. However, the market may not return to previous levels.
Nabila Popal, Senior Research Director at IDC’s Mobile Phone Tracker, says the memory crisis marks a structural reset. She warns that the sub-$100 smartphone segment may disappear. This segment currently represents about 171 million units. Even if memory prices stabilize by mid-2027, companies may find it permanently unprofitable.