The global smartphone market is projected to suffer its sharpest decline on record in 2026 as shortages of memory chips and rising component costs force manufacturers to cut production and adjust strategies, according to research by the International Data Corporation (IDC).
IDC forecasts worldwide smartphone shipments will fall by roughly twelve point nine percent this year, dropping to around 1.12 billion units — the lowest annual shipment volume seen in more than a decade. The projected decline marks a significant downward revision from earlier expectations, reflecting worsening supply constraints for memory components critical to modern smartphone performance.
The resulting memory crisis, driven in part by heavy demand from artificial intelligence infrastructure projects, has pushed up prices for dynamic random‑access memory (DRAM) and other chip components that are essential to smartphones. Analysts and industry executives describe the situation as a “tsunami‑like shock” originating in the memory supply chain that ripples across the broader consumer electronics sector.
The shortage’s impact is expected to hit manufacturers of budget Android devices the hardest, as lower‑end smartphone makers struggle to absorb higher costs and may be forced to raise prices or exit the market entirely. In contrast, larger players such as Apple and Samsung are positioned to better weather the squeeze due to stronger supply chain control and pricing power.
IDC also warns that average selling prices for smartphones are likely to rise as manufacturers prioritise higher‑margin models, with 2026 forecast to see a record increase in retail prices. While memory prices are expected to stabilise by mid‑2027, analysts believe the market will not return to previous norms, fundamentally reshaping long‑term industry structure and vendor landscape.