New Delhi: Global smartphone shipments are heading for their sharpest annual fall on record in 2026. After ending 2025 with low single digit growth, the market is now expected to reverse sharply as a severe memory shortage hits production and pricing across brands.
Counterpoint Research forecasts that global smartphone shipments will drop 12.4 per cent year on year in 2026, falling to just below 1.1 billion units. That would mark the lowest annual volume since 2013.
Memory crisis triggers record smartphone decline
The key reason is not weak demand alone; it is the supply. Counterpoint says a worsening memory supply crunch is driving the downturn, and the impact could stretch well into 2027.
Mobile LPDDR4 and LPDDR5 prices in Q2 2026 are expected to reach nearly three times the levels seen in Q3 2025. That is a sharp spike in a short time.
Principal Analyst Yang Wang said, “The impact is expected to continue through H2 2027, as it will take several quarters for memory supply expansion to materialise. Lower-end smartphones are likely to be affected the most, especially as LPDDR4 supply is shrinking faster than expected. OEMs are already responding with launch delays, streamlined portfolios, and specification trade-offs. We have also observed 10% to 20% price increases across some Android OEM portfolios in January 2026.”
Premium phones hold up, entry segment struggles
Not all segments will fall equally. Counterpoint expects premium smartphones to remain more resilient and grow in low single digits.
The sub 200 dollar segment is expected to decline by more than 20 per cent. Emerging markets such as the Middle East and Africa may decline 19 per cent, while Latin America and Asia Pacific could see 14 per cent drops each.
Brands with stronger supply chains and pricing power are likely to weather the pressure better. Smaller vendors may struggle to absorb rising bill of materials costs.
Industry consolidation and slower upgrades ahead
Counterpoint says the downturn is structural, not just cyclical. Memory manufacturers are shifting capacity to higher margin AI focused DRAM and enterprise storage. That leaves less supply for mobile-grade memory.
As a result, the industry may see:
- Slower replacement cycles, stretching beyond four years
- Higher average selling prices
- Slimmer product portfolios
- Growth in second hand smartphone sales
Recovery is unlikely before late 2027 and will depend on new memory capacity coming online. The smartphone market seems to be entering a new phase, shaped less by demand hype and more by supply realities.