Global smartphone shipments to drop 12% in 2026 amid memory chip crunch

Global smartphone shipments are on track for their steepest annual decline on record as soaring memory chip costs force manufacturers to raise prices and consumers to delay upgrades, according to new data from FDM CCS Insight. The analyst firm projects shipments will fall 12% this year, a figure it revised down from an earlier 15% forecast after the first half proved "more resilient than expected."mobilenewscwp

Prices Surge as Supply Stays Tight

Second-quarter shipments fell 7% year-on-year while average selling prices jumped 13% compared with the prior quarter, FDM CCS Insight reported. Counterpoint Research put the Q2 decline at 11%, the worst second quarter in 13 years. IDC has projected a full-year drop of 13.9% to roughly 1.09 billion units.finance.yahoo+2

The pressure is concentrated in memory chips. Samsung has warned that supply constraints could persist until 2028, with the worst shortages expected in 2027. SanDisk ↗ 1.32% CEO David Goeckeler said on the company's August earnings call that PC and smartphone unit shipments are expected to decline by the "mid-teens" percentage this year, though he sees NAND demand rebounding in 2027.globalsources+2

FDM CCS Insight analyst Ben Hatton said: "We remain cautious about the second half, as further price increases and prolonged memory shortages will continue to raise device prices and soften consumer demand."mobilenewscwp

Flagship Prices Approach $1,500

The premium segment is bearing the brunt of rising component costs. Phones priced above $600 accounted for a record 29% of global unit sales in the first half, according to Counterpoint. Apple ↘ 2.07% and Samsung captured 84% of that category.ts2

IDC analyst Nabila Popal has said iPhone 18 Pro models could rise by as much as $200, while Counterpoint estimates the iPhone 18 Pro Max's component bill could climb nearly $300 versus its predecessor. Digital Trends has argued those increases could push the Pro Max into a $1,449–$1,499 starting range. Motorola's Razr Ultra 2026 already launched at $1,499.99, up from $1,299 for the prior model.globalsources

Winners and Losers

The memory crunch is widening the gap between large and small manufacturers. Apple reported iPhone revenue up 22% to $54.25 billion in its most recent quarter, while Samsung's mobile and networks division posted an operating loss of KRW 0.7 trillion due to higher component expenses. Xiaomi shipments fell 26.3% in Q2, with Oppo and Vivo declining by similar margins.ts2

As new-device prices climb, the secondary market grew 3% in Q2, though shortages of used handsets limited expansion. Carriers are responding with longer financing terms — T-Mobile recently introduced 36-month installment plans — while manufacturers scale back promotional discounts that once cushioned buyers from list prices.globalsources+1

"As new devices become progressively more expensive, a growing number of consumers will seek alternatives in the secondary market," Hatton said.mobilenewscwp