Feb 26 (Reuters) – The worldwide smartphone market is poised to endure its greatest decline ever in 2026, sinking to a greater than decade low in shipments, as surging reminiscence chip costs drive up gadget prices, the Worldwide Information Company stated on Thursday.
Smartphone shipments are anticipated to drop 12.9% to 1.12 billion models, 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 will not be a momentary squeeze, however a tsunami-like shock originating within the reminiscence provide chain,” stated Francisco Jeronimo, vp for Worldwide Consumer Units at IDC.
A speedy build-out of AI infrastructure by tech companies reminiscent of Meta, Google and Microsoft has captured a lot of the reminiscence chips provide, lifting costs as producers prioritize elements for higher-margin knowledge facilities over shopper gadgets.
Reminiscence chips, or DRAM, are essential to smartphones as they permit power-hungry purposes to run easily.
Analysts have stated rising part prices will power budget-device targeted firms to cross the bills on to customers, simply as demand at greater worth factors is weakening.
Apple and Samsung, with stronger stability sheets and premium positioning, are higher positioned, IDC stated.
It expects the typical promoting worth of smartphones to surge 14% to a document $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 short lived decline; it marks a structural reset of the whole market,” stated Nabila Popal, senior analysis director at IDC’s Cellular Telephone Tracker.
She warned that the sub-$100 smartphone phase, representing 171 million gadgets, will turn into “completely uneconomical” even after reminiscence costs stabilize by mid-2027.
(Reporting by Kritika Lamba in Bengaluru; Enhancing by Shinjini Ganguli)
