As AI demand absorbs memory supplies, can smartphone makers avoid a prolonged downturn? Global shipments are heading for their lowest level in 13 years.
Global smartphone shipments are forecast to decline 13.9% year-on-year (YoY) to 1.08 billion units in 2026, their lowest level since 2013, according to Counterpoint Research. The revised outlook is worse than the 12.4% decline projected in February 2026 and reflects a deepening memory supply crisis that is driving up costs across the industry.
The shipments are expected to fall from 1.255 billion units in 2025 to 1.08 billion units in 2026, then recover modestly to 1.108 billion units in 2027.
The downturn is being driven by shrinking supplies of mobile memory as semiconductor manufacturers divert production to high-bandwidth memory (HBM) and server DRAM for artificial intelligence (AI) applications. Prices of LPDDR4 and LPDDR5 memory are expected to triple in the second quarter of 2026 compared with the fourth quarter of 2025.
The market showed early signs of weakness in the first quarter, with shipments declining 3.1% after nine consecutive quarters of growth. While manufacturers initially mitigated the impact by front-loading shipments ahead of expected increases in component prices, supply constraints have since intensified.
The effects are expected to be most severe in the entry-level segment. LPDDR4 supply is forecast to decline by more than 40% in 2026, while wholesale smartphone prices have already risen 14%. As inventories are exhausted, further price increases are expected, potentially making sub-US$150 smartphones uneconomical in some markets.
Despite the broader contraction, Apple and Samsung are projected to strengthen their positions. Apple’s market share is expected to rise from 20% in 2025 to 23% in 2026 and 2027, while Samsung’s share is forecast to increase from 19% to 21%. Together, the two companies could account for 44% of global shipments by 2027, up from 39% in 2025.
Among Chinese manufacturers, Huawei is expected to be the only major brand to grow shipments in 2026. Xiaomi’s market share is forecast to decline from 13% to 12%, while Vivo and Oppo are expected to remain broadly stable at 7-8%. Transsion’s share is projected to fall from 7% to 6%, while Honor is expected to hold steady at around 6%.
Counterpoint also expects the market share of smaller vendors, grouped under “Others”, to decline from 15% in 2025 to 12% by 2027, signalling further industry consolidation. The refurbished smartphone market, meanwhile, is forecast to grow 13% in 2026.
The research firm noted that the conflict involving Iran and the closure of the Strait of Hormuz have added geopolitical uncertainty to the outlook, although the economic impact is expected to be less severe than the inflationary shock that followed the Russia-Ukraine war.
Yang Wang, Principal Analyst at Counterpoint, concluded, “The memory crisis is the proximate cause, but the deeper story is structural, with fewer brands, higher prices, longer replacement cycles, and a market that increasingly rewards supply chain control and ecosystem depth over volume ambition. The brands that emerge strongest will be those that used this crisis to sharpen their portfolios rather than simply survive it.”
A broader market recovery is not anticipated before 2028, when memory supplies are expected to normalise, and technologies such as 6G and AI-native devices could support renewed demand.
