The global smartphone market is forecast to decline by 13% in 2026, as a prolonged memory chip shortage weighs heavily on production and margins, according to analyst house IDC.
IDC predicts that shipments will total around 1.12 billion units this year, marking the lowest annual figure in more than a decade. The revised outlook represents a sharp downgrade from the firm’s November forecast of. 0.9% decline, issued before the full scale of the memory supply crunch became clear.
Francisco Jeronimo, IDC’s Vice President of Worldwide Client Devices, described the shortage as more than a temporary disruption.
“This is not a temporary squeeze,” he said, calling it a “tsunami-like shock” impacting the entire consumer electronics industry.
Android vendors, particularly those focused on lower-priced devices, are expected to face the most significant pressure. Rising component costs are likely to erode margins in the budget segment, while premium manufacturers are seen as better positioned to absorb higher input costs.
“Apple and Samsung are better positioned to navigate this crisis,” Jeronimo said. “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 at IDC, said the impact would extend beyond short-term shipment declines.
“The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market, fundamentally reshaping long-term total addressable market, the vendor landscape and the product mix,” she said.
IDC expects consolidation among smaller manufacturers as volumes contract. Average selling prices are projected to rise 14% year-on-year to US$523 in 2026, reflecting the upward pressure on component costs.
Memory chipset prices are forecast to stabilise by mid-2027, but IDC cautioned they are unlikely to return to previous levels. As a result, smartphones priced below US$100 could become “permanently uneconomical”, according to Popal.
Regionally, emerging markets – where entry-level smartphones remain in higher demand – are expected to see the steepest shipment declines. The Middle East and Africa is forecast to contract by 20.6% year-on-year, while China and Asia-Pacific (excluding China and Japan) are projected to fall by 10.5% and 13.1% respectively.
Looking further ahead, IDC anticipates a modest 2% recovery in global shipments by mid-2027 as chipset prices stabilise, followed by a stronger rebound of 5.2% in 2028.