IDC forecasts record smartphone shipment decline in 2026 amid memory crisis

Worldwide smartphone shipments will fall 16.7% in 2026 to just over 1 billion units, according to IDC's Worldwide Quarterly Mobile Phone Tracker, marking the steepest annual contraction the industry has ever recorded. The forecast represents a sharp downgrade from the 13.9% decline IDC projected just one quarter ago, as a global memory shortage that began in late 2025 now strikes with full force in the second half of the year.idc

Prices Surge as Units Collapse

Despite the volume decline, total market value is expected to grow 6.3% to $613 billion, as higher prices do the heavy lifting that volume once did. The average selling price of a smartphone will reach $581 in 2026, up 27.6% in a single year, with NAND and DRAM costs up over 300% year-over-year.appleworld+1

"The memory tsunami that we warned about is now hitting the market in full, and consumers are starting to pay the AI bill," said Francisco Jeronimo, Vice President for Worldwide Client Devices at IDC. "The components that make AI possible are the same ones in short supply, and their cost is being passed straight through to the shelf."idc

The sub-$100 smartphone segment saw an almost 60% year-over-year drop in the second quarter of 2026 and is expected to fall faster in the second half. IDC says memory prices will continue increasing until at least 2028, and vendors are adapting to what it calls a "permanently higher cost structure."idc

Winners and Losers

The crisis is hitting unevenly. Android shipments are forecast to fall 24.3% in 2026, while iOS shipments decline just 1.3%, pushing Apple's ↗ 1.15% market share to a record 23.6%. Samsung benefits from making its own memory and logic chips, with memory profit margins recently in the 80% range, according to EE Times.eetasia+1

Chinese smartphone makers such as Xiaomi are more exposed. "It's obviously impossible to maintain this type of low-cost business model," International Business Strategies CEO Handel Jones told EE Times, noting Xiaomi's average smartphone price was about $160 in 2025.eetasia

The only growing segment is foldables, forecast to rise 12.6% to 22.9 million units in 2026, driven largely by Apple's entry into the category.idc

A Structural Shift

Analysts describe the changes as permanent rather than cyclical. SemiAnalysis analyst Sravan Kundojjala told EE Times that memory pricing is "running hot" because of high demand from AI data centers and limited supply. TechInsights vice chair Dan Hutcheson noted that smartphone companies are no longer price-makers — AI chipmakers have taken that role, with average IC prices up 28% since the start of recent geopolitical disruptions.eetasia

IDC's forecast concludes bluntly: "The cheap smartphone era is not pausing. It is over."idc