According to a report by IDC, the global smartphone market is projected to witness its steepest decline on record in 2026, with shipments expected to fall to a more than decade low amid rising device costs driven by surging memory chip prices.
IDC said smartphone shipments are likely to drop 12.9 per cent year-on-year to 1.12 billion units. The downturn is expected to disproportionately impact low-end Android manufacturers, while larger players such as Apple and Samsung are likely to gain market share as smaller vendors struggle to absorb rising input costs or exit the market.
As per the report, the rapid expansion of artificial intelligence infrastructure by technology companies including Meta, Google and Microsoft has tightened the supply of memory chips, leading to price increases as manufacturers prioritise higher-margin data centre components over consumer devices. DRAM, a critical component in smartphones, plays a key role in enabling high-performance applications and multitasking. Analysts noted that the rise in component costs is likely to compel budget-focused device makers to pass on higher expenses to consumers, even as demand at higher price points shows signs of softening.
Further, the report added that Apple and Samsung, supported by stronger balance sheets and premium portfolios, are better positioned to navigate the cost pressures compared to smaller competitors.
Furthermore, the report expects the average selling price (ASP) of smartphones to rise 14 per cent to a record $523 in 2026, as manufacturers increasingly shift towards higher-margin models to offset escalating component costs.
Looking ahead, IDC forecasts a modest 2 per cent recovery in shipments in 2027 as supply-side pressures ease, followed by a 5.2 per cent rebound in 2028, although it cautioned that the market may not revert to its earlier growth trajectory.
