Global smartphone shipments fall 11% on memory shortage

Global smartphone shipments fell 11% year on year in the second quarter of 2026, according to Counterpoint Research, dropping to their lowest second-quarter level since 2013.

The slump was driven by a deepening shortage of DRAM and NAND memory, which raised component costs and pushed up handset prices, especially for entry-level and mid-tier devices. Memory suppliers continued to prioritise demand from AI data centres over consumer electronics, adding pressure across the smartphone supply chain.

Samsung regained the top spot in the global market with a 24% share in the quarter. It also recorded the strongest annual growth among the five biggest smartphone brands, helped by better product availability, fewer price increases in some markets and promotions in India and the Middle East.

The Galaxy S26 range supported that performance, with the Ultra model identified as the line-up's strongest seller. Counterpoint also pointed to Samsung's broader product refresh as helping it withstand weaker demand in lower-priced categories.

Apple was the only other top-tier brand to post growth, with shipments up 3% from a year earlier. Its market share reached 20% in the quarter for the first time, helped by demand for the iPhone 17 range, which remained the world's top-shipped smartphone model.

China remained a weaker market for Apple, where shipments fell from a year earlier despite an early promotional campaign ahead of the 618 shopping period. Discounts were less aggressive than in the same period a year earlier, while older iPhone models also saw softer demand as component allocation favoured current-generation devices.

Xiaomi, OPPO and vivo each posted double-digit shipment declines in the quarter. All three had greater exposure to entry-level and mid-range phones, where rising memory costs and higher retail prices hit demand hardest.

Xiaomi held a 12% market share after simplifying its product portfolio and easing retailer financing terms. It also gained some momentum in higher-priced devices, including the Redmi Note 15 series, Redmi K90 and Xiaomi 17 range.

OPPO ranked fourth with an 11% share, while vivo was fifth with 8%. Vivo also faced supply issues, while price increases pushed several key models beyond important pricing thresholds for buyers. OPPO saw weaker demand across most of its main markets, although its A-series and Reno devices helped limit the decline.

Outside the top five, Google and Huawei both recorded shipment growth. Google's shipments rose 16% year on year, supported by the Pixel 10 and 10a in mature markets, while Huawei's increased 6%, supported by the Mate 80 series, Nova 15 and Enjoy 90 range.

Cost pressure

The report said the memory shortage had become the main drag on the smartphone industry, overtaking other pressures on demand. Handset makers have responded in different ways, including raising prices, extending the sales life of older models, increasing promotions, and cutting launches and production.

Counterpoint also linked weaker smartphone demand to a broader economic squeeze. Geopolitical tensions in the Middle East have raised oil and shipping costs, adding to price pressure across the market, while slower global growth, higher inflation and weak consumer sentiment have hurt price-sensitive customers.

Commenting on the market dynamics, Senior Analyst Shilpi Jain said: "The global memory crisis has now overtaken every other factor as the single biggest drag on the smartphone industry. What started as a components issue last year is now a full-blown demand issue. Entry and mid-tier devices, which account for most of global smartphone volumes and are the most exposed to BOM economics, have become structurally unfeasible at previous price points. We see OEMs responding in different ways: some are increasing prices and accepting margin pressure, while others are extending the lifecycle of older-generation models and using promotions to retain budget-conscious buyers, and a few are simply pulling back on launches and production. Alongside the memory shortage, geopolitical tensions in the Middle East have pushed up oil and shipping costs, further inflating smartphone prices. This has coincided with a broader macro squeeze, slower global growth, higher inflation, and record-low consumer sentiment, which hit price-sensitive buyers the hardest."

Outlook weak

Counterpoint expects global smartphone shipments to fall by about 14% for the full year. It also said the memory shortage is likely to continue into 2027, suggesting manufacturers will keep focusing on higher-value models, storage adjustments, refurbished phones and older-generation devices as they try to retain pressured buyers.

Premium devices should prove more resilient than the wider market, supported by financing offers, brand loyalty and retail demand linked to AI features. Overall demand recovery is unlikely until memory supply conditions improve substantially.