Worldwide smartphone shipments fell 11% from a year earlier as rising memory costs hit lower-priced devices, while Samsung led the market and Apple reached a record 20% global share.
By yourNEWS Media Newsroom
Global smartphone shipments fell to their lowest second-quarter level in 13 years as memory chip manufacturers redirected production toward artificial intelligence infrastructure, raising component costs and weakening demand for consumer devices.
Worldwide shipments declined 11% from the same period a year earlier during the second quarter, according to a preliminary market monitor report released July 13 by Counterpoint Research.
The contraction affected manufacturers unevenly. Samsung reclaimed the largest share of the global market, while Apple expanded its portion of worldwide shipments to 20% for the first time.
The broader industry decline was tied primarily to shortages and rising prices for dynamic random-access memory, or DRAM, and NAND flash storage. DRAM supplies the working memory used by smartphones, while NAND provides long-term storage for applications, photographs, videos and other files.
Chipmakers have increasingly prioritized higher-value orders from companies building AI data centers, leaving smartphone producers competing for a more limited supply of memory components.
As DRAM and NAND prices increased, device manufacturers raised retail prices, reduced production, delayed product introductions or accepted narrower profit margins, Counterpoint said.
The impact was most pronounced among entry-level and midpriced smartphones, which account for most global unit sales and appeal to buyers who are particularly sensitive to price increases.
“The global memory crisis has now overtaken every other factor as the single biggest drag on the smartphone industry,” Counterpoint senior analyst Shilpi Jain said.
“What started as a components issue last year is now a full-blown demand issue.”
Manufacturers have adopted several strategies in response to higher memory expenses.
Some companies increased device prices while accepting smaller margins on individual sales. Others extended the commercial life of older models and relied more heavily on discounts and promotions to maintain demand.
Additional manufacturers postponed new-product launches or reduced planned production volumes rather than releasing devices at prices consumers might reject.
The memory shortage was not the industry’s only source of pressure.
Continuing geopolitical tensions in the Middle East increased transportation and shipping expenses, adding further costs to devices already affected by more expensive components.
Those conditions coincided with slower worldwide economic growth, persistent inflation and weakening consumer confidence.
“This coincided with a broader macro squeeze, slower global growth, higher inflation, and record-low consumer sentiment, which hit price-sensitive buyers the hardest,” Jain said.
Technology executives have warned that higher component costs will eventually require broader price adjustments.
Apple CEO Tim Cook said during a June interview with The Wall Street Journal that price increases were unavoidable as the shortage deepened.
Apple announced that month that it was raising prices on several popular electronic products, including tablets, speakers and laptop computers. The company did not announce corresponding price increases for its smartphones.
Despite the industrywide contraction, Apple’s iPhone shipments increased 3% from the previous year during the second quarter.
That growth lifted Apple’s share of worldwide smartphone shipments to a record 20%, according to Counterpoint.
Apple reported nearly $57 billion in iPhone net sales during its fiscal second quarter, which ended March 31.
Samsung surpassed Apple in shipment share and returned to the top position among smartphone manufacturers with 24% of the global market.
The South Korean company benefited from aggressive summer promotions and strong demand for its premium Galaxy S26 Ultra.
Counterpoint said the model’s privacy display and artificial intelligence functions helped support Samsung’s overall second-quarter growth.
Samsung reported approximately $25.4 billion in first-quarter sales for its mobile division on April 30.
The market was considerably more difficult for Chinese manufacturers concentrated in lower-cost categories.
Xiaomi, OPPO and vivo each recorded double-digit shipment declines during the quarter as higher memory prices disrupted entry-level and mid-tier sales.
Those companies were particularly exposed because budget and moderately priced devices typically leave manufacturers with less room to absorb rising component expenses without increasing retail prices.
Outside the five largest manufacturers by market share, Google and Huawei posted shipment growth.
Google’s shipment volume increased 16%, while Huawei recorded a 6% increase during the quarter.
Counterpoint expects the pressure to continue through the remainder of the year.
Global smartphone shipments are projected to fall 14% for all of 2026 as the memory shortage constrains production and suppresses purchases, Jain said.
Manufacturers are expected to focus increasingly on profitability rather than total shipment volume.
“[Manufacturers] are likely to keep prioritizing value over volume, trimming low-margin models, pushing configuration and storage-tier adjustments, and leaning further into refurbished and previous-generation devices to retain budget-conscious buyers,” Jain said.
That strategy could result in fewer inexpensive models, altered memory and storage configurations and a larger role for refurbished or older-generation smartphones.
The second-quarter results demonstrate how the AI investment boom is reshaping markets beyond servers and data centers.
As semiconductor companies devote more capacity to profitable AI customers, smartphone makers face rising costs for components that are essential to nearly every device.
Those expenses are now affecting production decisions, product schedules and consumer demand, transforming what began as a supply-chain problem into a broader contraction across the global smartphone market.
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