Smartphone market forecast to decline this year due to memory shortage
Source: Hacker News
Worldwide smartphone shipments are forecast to decline 12.9 % year‑on‑year (YoY) in 2026 to 1.12 billion units, according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. This would be the lowest annual shipment volume in more than a decade and represents a sharp revision from IDC’s November forecast amid an intensifying memory shortage crisis.
Forecast Overview
The decline is driven primarily by a severe memory‑chip shortage that is affecting the entire consumer‑electronics supply chain. IDC expects the market to reach its lowest point in 2026 before a modest recovery of 2 % in 2027 and a stronger rebound of 5.2 % YoY in 2028 as supply constraints ease.
Industry Commentary
Francisco Jeronimo, Vice President for Worldwide Client Devices, IDC
“What we are witnessing is not a temporary squeeze, but a tsunami‑like shock originating in the memory supply chain, with ripple effects spreading across the entire consumer electronics industry. 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. By contrast, Apple and Samsung are better positioned to navigate this crisis. As smaller and low‑end‑positioned Android vendors struggle with rising costs, Apple and Samsung could not only weather the storm but potentially expand market share as the competitive landscape tightens.”
Nabila Popal, Senior Research Director, IDC
“The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market, fundamentally reshaping long‑term TAM (Total Addressable Market), the vendor landscape, and the product mix. We expect consolidation as smaller players exit, and low‑end vendors face sharp shipment declines amid supply constraints and lower demand at higher price points. Although shipments will witness a record drop, smartphone ASP is projected to rise 14 % to a record $523 this year. While memory prices are projected to stabilize by mid‑2027, they are unlikely to return to previous levels—making the sub‑$100 segment (≈ 171 million devices) permanently uneconomical. In short, there is no return to business as usual for vendors and consumers.”
Regional Outlook
Markets with a high concentration of low‑end smartphones are forecast to decline the most.
- Middle East & Africa: ‑20.6 % YoY
- China: ‑10.5 % YoY
- Asia Pacific (excl. Japan & China): ‑13.1 % YoY
Worldwide Smartphone Forecast (4Q 2025 Release)
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