Rising demand for AI technologies has intensified pressure on global memory supplies, triggering a chip shortage that is now impacting the smartphone industry. International Data Corporation (IDC) has warned that global smartphone shipments are likely to contract significantly in 2026, marking the lowest annual volumes seen in more than a decade.
According to IDC’s latest report, worldwide smartphone shipments are projected to decline 12.9% year-on-year in 2026 to 1.1 billion units. The downturn is expected to hit low-end smartphone markets the hardest, as rising component costs squeeze margins. “The global smartphone market, particularly Android manufacturers, faces a significant threat. Vendors whose business is mainly at the low end of the market are likely to suffer the most. Rising component costs will hit their margins and they will have no choice but to pass the costs on to end users,” said Francisco Jeronimo, Vice President for Worldwide Client Devices at IDC. He added that companies like Apple and Samsung are better positioned to navigate this crisis.
Jeronimo noted that as smaller, budget-focused Android brands struggle with mounting costs, larger players such as Apple and Samsung could strengthen their market positions and continue gaining share. Nabila Popal, Senior Research Director with IDC’s Worldwide Quarterly Mobile Phone Tracker, expects industry consolidation, with smaller companies exiting the market and low-end vendors facing sharp shipment declines due to tight supply and reduced demand at higher price points. She highlighted that average selling prices are set to rise 14% to a record $523 (roughly Rs. 47,000) despite falling shipments. ” While memory prices are projected to stabilise by mid-2027, they are unlikely to return to the previous level — making the sub-$100 (roughly Rs. 9,000) segment permanently uneconomical. In short, there is no return to business as usual for vendors and consumers,” Popal said.
Regionally, markets dominated by entry-level smartphones will see the steepest declines. The Middle East and Africa could drop 20.6% YoY, while China and Asia Pacific (excluding Japan and China) may decline 10.5% and 13.1%, respectively. IDC expects memory prices to stabilize by mid-2027, followed by a modest 2% recovery in 2027 and a stronger 5.2% year-on-year rebound thereafter.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
