Smartphone shipments come under pressure as memory prices squeeze sector

Global smartphone shipments are expected to decline 12 percent year-on-year in 2026 as rising memory and component prices pressure the industry, with a mild recovery not likely until 2028, according to the market research company Omdia.

"Overall, mature markets are more resilient to price fluctuations, while emerging markets are significantly hit by rising costs, accelerating market polarization," Liu Yixuan, research director at Omdia, said. She noted that shipments are under pressure from memory and other component price hikes, but market value has risen against the trend, pushing vendors to prioritize profitability, with foldables and AI phones becoming key innovation tracks.

In the second quarter, global smartphone shipments fell year-on-year while the share of leading vendors further concentrated, Liu said. Despite lower shipment volumes, average selling prices rose sharply, driving overall market value higher.

Cost pressure is forcing vendors to adjust product strategies, Liu said: the low-end segment is rapidly shrinking, while demand for mid- to high-end phones priced between $200 and $699 and those priced at $700 or more is growing. Major vendors are abandoning the pursuit of shipment scale alone and putting profitability first, with some cutting low-end products, reallocating regional resources and exploring device rental models to hedge against the downturn.

To cope with the challenges, Chinese smartphone vendors are rushing to roll out new devices featuring latest technologies. For instance, Vivo unveiled its new imaging flagship lineup, the vivo X500 series, marking its first major release since elevating dynamic imaging to a company-level strategy. The new phones debut the BluePrint dynamic imaging technology stack, Vivo's first architecture built specifically for motion, targeting excellence in both photography and video.