Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTFiona CraigSun, June 7, 2026 at 6:11 PM GMT+2 3 min readiphone NEW SIZE ©PexelsThe global smartphone market is on track for its largest yearly decline ever recorded, with device shipments expected to fall 13.9% in 2026 to approximately 1.08 billion units, according to new projections released by Counterpoint Research.The latest forecast represents a deterioration from the firm’s February estimate, which had anticipated a 12.4% annual decline. Analysts attribute the worsening outlook largely to escalating shortages of memory chips, a situation that has been further complicated by disruptions linked to the conflict involving Iran.Lower-Cost Smartphones Face the Greatest PressureThe effects of the supply crunch are proving particularly severe in the entry-level and mid-range smartphone categories.As semiconductor manufacturers prioritize production of chips destined for artificial intelligence applications, fewer components are being allocated to lower-priced mobile devices. This shift has made budget smartphones increasingly difficult and less profitable to manufacture.Counterpoint reported that average wholesale smartphone prices increased 14% during the first quarter, while overall shipments declined 3.1% from a year earlier.The research firm expects pricing pressures to intensify as inventories accumulated before the supply disruption are gradually exhausted. As a result, certain smartphone models priced below $150 may eventually disappear from the market.“Smartphone makers in the low and mid-tier are caught between cost increases they cannot absorb and consumers with limited spending power,” said Wang Yang, a principal analyst at Counterpoint, an independent research company that publishes quarterly smartphone shipment data.“The question is no longer how to grow shipments or market share, but whether to remain in the market at all.”Industry Faces Unprecedented Supply ChallengesAccording to Wang, the current memory chip shortage represents the most significant supply-side challenge the smartphone sector has experienced to date.He noted that manufacturers have limited options for mitigating the impact, as higher costs cannot easily be offset through price increases or major product redesigns.The shortage is placing considerable pressure on profitability across the industry, particularly among companies focused on value-oriented devices.Premium Smartphone Segment Shows Greater StabilityWhile the lower end of the market is struggling, premium smartphone manufacturers have demonstrated greater resilience.Apple (NASDAQ:AAPL) reported record revenue during the first quarter, supported by strong demand from customers upgrading to the iPhone 17 lineup.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info