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Feb 26 (Reuters) – The worldwide smartphone market is poised to endure its largest decline ever in 2026, sinking to a greater than decade low in shipments, as surging reminiscence chip costs drive up system prices, the Worldwide Information Company 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 battle or exit the market solely, the report stated.
“What we’re witnessing isn’t a short-term squeeze, however a tsunami-like shock originating within the reminiscence provide chain,” stated Francisco Jeronimo, vp for Worldwide Shopper Units at IDC.
A fast build-out of AI infrastructure by tech companies akin to Meta, Google and Microsoft has captured a lot of the reminiscence chips provide, lifting costs as producers prioritize parts for higher-margin knowledge facilities over shopper units.
Reminiscence chips, or DRAM, are essential to smartphones as they permit power-hungry purposes to run easily.
Analysts have stated rising element prices will pressure budget-device centered corporations to move the bills on to shoppers, simply as demand at greater value factors is weakening.
Apple and Samsung, with stronger stability sheets and premium positioning, are higher positioned, IDC stated.
It expects the typical promoting value of smartphones to surge 14% to a report $523 this 12 months, as producers shift towards higher-margin fashions to offset ballooning prices.
IDC expects a modest 2% restoration in 2027 as 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 reminiscence disaster will trigger greater than a brief decline; it marks a structural reset of your complete market,” stated Nabila Popal, senior analysis director at IDC’s Cellular Cellphone Tracker.
She warned that the sub-$100 smartphone phase, representing 171 million units, will turn into “completely uneconomical” even after reminiscence costs stabilize by mid-2027.
(Reporting by Kritika Lamba in Bengaluru; Enhancing by Shinjini Ganguli)
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