Global smartphone shipments fell 11% year-on-year in the April-June quarter of 2026, marking the weakest second-quarter performance since 2013, as soaring memory chip prices and weak consumer demand weighed on the industry, according to preliminary estimates by Counterpoint Research's Market Monitor.
Memory Shortage Hits Demand
Counterpoint said the prolonged shortage of Dynamic Random-Access Memory (DRAM) and Not-AND (NAND) memory chips has emerged as the biggest challenge for smartphone makers. Memory suppliers have continued to prioritise AI data centre demand, pushing up component costs for handset manufacturers.
As a result, several brands raised smartphone prices, particularly in the entry- and mid-range segments. In contrast, others delayed launches, extended older product cycles or relied on promotions to support sales.
Senior Analyst Shilpi Jain said the memory crisis has shifted from being a supply-chain issue to a demand problem, with rising prices discouraging budget-conscious consumers from upgrading their devices. Higher shipping costs, geopolitical tensions and persistent inflation further weakened demand during the quarter.
"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. The entry and mid-tier devices, which account for a majority of the world's smartphone volumes and are the most exposed to BOM economics, 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 bumped up oil and shipping costs, further inflating smartphone prices. This coincided with a broader macro squeeze, slower global growth, higher inflation, and record-low consumer sentiment, which hit price-sensitive buyers the hardest,” Jain said, commenting on the report.
Also Read: Mobile, Laptop Sales Slow As Rising Memory Costs Push Up Prices; Refurbished Market Gains Traction
Samsung Regains Top Spot
Samsung reclaimed the top position globally with a 24% market share in the second quarter of fiscal 2026, supported by strong demand for its Galaxy S26 series and stable pricing across key markets such as India and the Middle East.
Apple retained the second position, with shipments rising 3% year-on-year and its market share touching a record 20%. Counterpoint noted Apple was the only major smartphone brand that did not increase prices during the quarter.
Meanwhile, Xiaomi, OPPO and Vivo reported double-digit declines in their shipments as their larger exposure to the price-sensitive entry and mid-range segments hurt volumes amid rising handset prices.
What It Means for Indian Companies
Slower global smartphone demand may weigh on export-oriented manufacturers and component suppliers such as Dixon Technologies, Kaynes Technology India, Syrma SGS Technology and PG Electroplast if OEM production remains subdued.
However, companies with a strong domestic manufacturing presence could benefit if global brands continue diversifying production to India under the government's production-linked incentive (PLI) scheme, partially offsetting weaker global demand.
Also Read: Chip Stocks Lose Spark: Micron, SanDisk, Intel Plunge Up To 8% On SK Hynix Jitters.
Outlook
Counterpoint expects smartphone shipments to remain under pressure through the rest of 2026, with the global memory shortage likely to extend into 2027. The research firm believes brands will increasingly focus on premium devices, refurbished smartphones and older-generation models until memory supply improves.
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