Global Smartphone Shipments to Fall 7% in 2026 Amid Rising Memory Costs: Omdia

Global smartphone shipments are expected to decline about 7 percent year-on-year in 2026 as rising memory costs and supply constraints increase pressure on device makers, according to new forecasts from research firm Omdia.

The outlook assumes memory pricing stabilizes later in the year, but analysts say the market will still face significant headwinds as memory components take up a growing share of smartphone manufacturing costs.

Since late 2025, manufacturers have already begun raising retail prices to protect margins. However, sustained price increases could dampen demand, particularly in price-sensitive emerging markets where lower-cost smartphones dominate sales.

The pressure is expected to be most severe in entry-level segments. Devices priced below $100 could see shipments drop by nearly 31 percent in 2026 as vendors struggle with shrinking margins and higher component costs. Smartphones priced between $100 and $399 — which account for the bulk of global smartphone volumes — are also projected to decline as rising memory prices push retail prices higher.

These segments are largely served by entry-focused manufacturers that depend heavily on older memory technologies and operate with thinner margins, leaving them more vulnerable to supply constraints and cost inflation.

By contrast, the premium segment is expected to remain relatively resilient. Smartphones priced above $800 are forecast to grow about 4 percent in 2026, supported by stronger brand power and greater pricing flexibility.

Apple is expected to maintain a strong position in the high-end market due to its supply chain leverage and higher margins, while Samsung Electronics benefits from vertical integration and its internal semiconductor capabilities.

 

Omdia warned that downside risks to the market remain significant. If memory prices continue rising due to tight supply and growing demand from artificial intelligence data centers, global smartphone shipments could fall by more than 15 percent in 2026 — potentially exceeding the 12 percent contraction recorded in 2022.

Geopolitical tensions, particularly in the Middle East, could further complicate the outlook by driving up energy costs, shipping expenses and currency volatility, factors that may weaken consumer upgrade cycles in developing markets.

The shifting cost environment is also expected to ripple through the broader smartphone supply chain. Suppliers of mid-range and entry-level components — including chipsets, camera modules and other parts — could face declining orders and increased pricing pressure as manufacturers simplify product designs and reduce component costs.

Analysts said vendors may increasingly rely on shorter production cycles and tighter inventory planning to manage ongoing volatility in component pricing and consumer demand.