Smartphone market set for biggest-ever decline in 2026 on memory price surge, IDC says
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Apple and Samsung are positioned to gain market share as smaller smartphone rivals struggle or exit the market entirely, said IDC.
PHOTO: REUTERS
- Global smartphone shipments will drop 12.9% in 2026, reaching a decade low. Surging memory chip prices, driven by AI infrastructure demand, are the cause.
- Low-end Android makers will be hit hardest, while Apple and Samsung gain market share. Smartphone average selling prices will surge 14% to US$523.
- The market faces a "structural reset," with modest recovery by 2027. The sub-US$100 segment will become "permanently uneconomical" even after prices stabilise.
AI generated
NEW YORK - 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 (IDC) said on Feb 26.
Smartphone shipments are expected to drop 12.9 per cent 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 Mr 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 prioritise components for higher-margin data centres over consumer devices.
Memory chips, or DRAM, are crucial to smartphones as they allow power-hungry apps 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 per cent to a record US$523 (S$661) in 2026, as manufacturers shift towards higher-margin models to offset ballooning costs.
IDC expects a modest 2 per cent recovery in 2027 as the crisis eases, followed by a 5.2 per cent 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 Ms Nabila Popal, senior research director at IDC’s mobile phone tracker.
She warned that the sub-US$100 smartphone segment, representing 171 million devices, will become “permanently uneconomical” even after memory prices stabilise by mid-2027. REUTERS
