Smartphone Shipments Fall 20% as Memory Prices Squeeze Handset Makers

A slump tied to memory supply

Counterpoint said higher memory costs have raised component expenses for phone makers and fed through to retail prices. The decline had been signaled earlier. In February, IDC forecast that global smartphone shipments would fall 12.9% in 2026 to 1.12 billion units, which it called the steepest decline on record.

IDC attributed the pressure to AI data center buildouts absorbing memory supply, with chipmakers prioritizing higher-margin data center parts. It also projected the average smartphone selling price would climb 14% to a record $523. "What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain," said Francisco Jeronimo, Vice President for Worldwide Client Devices at IDC, at the time.

Who lost and who held up

Counterpoint reported that Samsung held first place with a 23% share on a 3% shipment decline. Apple took 22%, its first third-quarter share above 20%. Counterpoint said Apple's shipments declined, which it attributed partly to the absence of a base iPhone 18 model, even as the company gained share.

Chinese brands were hit harder. Xiaomi shipments fell more than 30%, while OPPO and vivo each fell more than 20%. In China, the world's largest smartphone market, IDC's preliminary data showed shipments down 15.4% in the quarter, and Apple's share there rose to 17.8% from 15.8% a year earlier. Counterpoint senior analyst Shilpi Jain said consumers are holding on to their devices longer than estimated.

Chip suppliers feel the split

The source describes a divided market: phone makers and chip suppliers that depend on handset volumes are absorbing the hit, while memory makers are reporting record results.

• Qualcomm: fiscal third quarter 2026 revenue was $9.9 billion, down 4%. Handset chip revenue fell 20% to $5.09 billion. The company cited a challenging memory and supply environment and rising input costs, while automotive revenue grew 61% to $1.59 billion.
• Arm: record first quarter fiscal 2027 revenue of $1.29 billion, up 22%, with royalty revenue of $715 million. Management pointed to smartphone softness from elevated memory prices and said full-year royalty growth is now expected closer to the high teens, with data center demand offsetting handset weakness.
• Micron: record fiscal fourth quarter 2026 revenue of $54.23 billion, up from $11.32 billion a year earlier. Its Mobile and Client Business Unit generated $13.11 billion, compared with $3.76 billion. CEO Sanjay Mehrotra said, "Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027."
• Sandisk: fiscal fourth quarter 2026 revenue of $8.97 billion, up 372% year over year, with about two-thirds of the sequential increase coming from higher pricing. Consumer revenue slipped 5% to $556 million.

What it means for the market

Apple reported revenue of $109.4 billion for its fiscal third quarter ended June 27, 2026, up 16% year over year, with iPhone revenue of $54.3 billion. Its share gains show that larger players can gain ground even as total volumes shrink.

For buyers, the figures point to higher prices and longer device ownership. For the industry, they show that demand for memory from AI data centers is shifting profits toward memory suppliers and away from handset-dependent businesses. The source is a commentary piece from American News Group, which carries a disclaimer that it is not financial advice and promotes an affiliated product.