Feb 26 (Reuters) – The world smartphone market is poised to undergo its largest decline ever in 2026, sinking to a greater than decade low in shipments, as surging reminiscence chip costs drive up gadget prices, the International Data Corporation stated on Thursday.
Smartphone shipments are anticipated to drop 12.9% to 1.12 billion items, the analysis agency stated in a report.
The decline will hit low-end Android producers the toughest, whereas Apple and Samsung are positioned to achieve market share as smaller rivals wrestle or exit the market fully, the report stated.
“What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain,” stated Francisco Jeronimo, vp for Worldwide Client Devices at IDC.
A fast build-out of AI infrastructure by tech corporations reminiscent of Meta, Google and Microsoft has captured a lot of the reminiscence chips provide, lifting costs as producers prioritize elements for higher-margin knowledge facilities over client units.
Memory chips, or DRAM, are essential to smartphones as they permit power-hungry purposes to run easily.
Analysts have stated rising element prices will power budget-device targeted corporations to move the bills on to shoppers, simply as demand at larger worth factors is weakening.
Apple and Samsung, with stronger stability sheets and premium positioning, are higher positioned, IDC stated.
It expects the common promoting worth of smartphones to surge 14% to a file $523 this 12 months, as producers shift towards higher-margin fashions to offset ballooning prices.
IDC expects a modest 2% restoration in 2027 because the disaster eases, adopted by a 5.2% rebound in 2028, although it stated that the market was unlikely to return to earlier norms.
“The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market,” stated Nabila Popal, senior analysis director at IDC’s Mobile Phone Tracker.
She warned that the sub-$100 smartphone phase, representing 171 million units, will turn out to be “permanently uneconomical” even after reminiscence costs stabilize by mid-2027.
(Reporting by Kritika Lamba in Bengaluru; Editing by Shinjini Ganguli)