The global smartphone market
is heading for its steepest annual contraction on record, with
shipments projected to slump by 13.9% this year to 1.08 billion
units, Counterpoint Research said on Monday, citing a worsening
shortage of memory chips.
The forecast is a downgrade from the 12.4% decline projected in
February, with the squeeze in global chip supply exacerbated by
the Iran war.
The impact is being felt most acutely in lower-end
smartphones as chipmakers shift production capacity to
AI-related chips, making entry-level devices less economical to
produce.
Global smartphone wholesale prices rose 14% in the first
quarter while shipments fell 3.1% year on year. That trend is
expected to continue as inventory built before the supply shock
becomes depleted, with some models priced below $150 likely to
disappear from the market.
“Smartphone makers in the low and mid-tier are caught
between cost increases they cannot absorb and consumers with
limited spending power,” said Wang Yang, a principal analyst at
Counterpoint, an independent research company that publishes
quarterly smartphone shipment data.
“The question is no longer how to grow shipments or market
share, but whether to remain in the market at all.”
The memory chip shortage is the most severe supply-side
disruption the smartphone industry has faced, Wang said, adding
that manufacturers are unable to offset the impact through
pricing or product changes.
PREMIUM END OF THE MARKET MORE RESILIENT
The premium segment has proven more resilient. Apple
posted record revenue for the first three months of the year,
helped by customers upgrading to its iPhone 17 series. Apple’s
2026 shipments are expected to remain flat before rising 5% next
year, Counterpoint projections show.
With more stable chip supply and stronger margins than many
rivals, Apple is well placed to gain market share and could face
less pressure to raise prices.
Samsung Electronics kept volumes steady in the
first quarter and is expected by Counterpoint to register only a
4% decline in shipments over the full year, outperforming the
wider market thanks to stable supply and a consistent product
line-up.
Transsion, which is heavily exposed to the
market for smartphones priced below $150, is forecast to suffer
a 32% drop in shipments this year. Rivals Xiaomi and
Honor, meanwhile, are projected to post full-year declines of
28% and 20% respectively, Counterpoint said.
Published on June 1, 2026
