Global Smartphone Market Braces for Record Drop Amid Memory Crunch

With input from CNBC, Al Jazeera, CNN, and Bloomberg.

The smartphone world is in for a rough ride in 2026. Analysts are warning that global smartphone shipments could plunge by double digits next year, marking the steepest decline ever as a memory chip shortage shakes the industry.

Counterpoint Research is projecting a 12% drop in smartphone shipments, while the International Data Corporation expects smartphones and PCs to shrink by 13% and 11%, respectively. If those numbers hold, 2026 could see annual smartphone volumes hit their lowest point since 2013.

The culprit? A worsening memory crunch. Tech giants pouring billions into AI infrastructure – from hyperscale data centers to AI training rigs – are gobbling up the memory chips that smartphone and PC makers rely on.

“Memory companies are basically telling smartphone vendors to wait their turn behind the hyperscalers,” said Tarun Pathak, Counterpoint’s research director.

That leaves device makers struggling to secure enough RAM and other components, driving costs up.

Even forecasts from late 2025 underestimated how bad the shortage would get. Bryan Ma, VP of devices research at IDC, explained:

“It’s dramatically worsened over the past few months. We thought we had it figured out back in November, but it just kept getting worse.”

The shortage isn’t just about numbers – it’s reshaping the market. With memory costs eating into margins, manufacturers may raise prices, push consumers to mid- and high-end devices, and potentially exit the low-end market altogether. On the flip side, the used and secondary smartphone market looks set to expand as budget-conscious buyers get priced out.

Big players like Apple and Samsung are better positioned to weather the storm. They have tighter supply chains, premium pricing power, and models that hold sway even in the resale market.

“This is a scale game,” Ma said.

As for relief? Don’t hold your breath. Analysts say the earliest signs of improvement won’t come until late 2027, when additional memory capacity is expected to hit the market. Until then, the industry faces shrinking volumes, higher prices, and longer replacement cycles.

Still, there’s a silver lining. Pathak notes:

“The smartphone market has always been resilient… eventually, people will need a phone.”