Global smartphone shipments are contracting sharply in 2026 as soaring memory component costs and severe supply chain constraints drive up retail prices and dampen consumer demand. According to a report from FDM CCS Insight, worldwide smartphone shipments fell 7% year-on-year in the second quarter of 2026, following a 3% drop from the first quarter.
Global Shipment Decline and Regional Impact
FDM projects that global smartphone shipments will contract by up to 12% across the entire year of 2026. Meanwhile, alternative industry tracking from Counterpoint Research, as reported by selfd.id, estimates an even steeper contraction, bringing total shipments down due to geopolitical supply disruptions and memory shortages. Developed markets in Europe and North America have cushioned the blow with single-digit percentage declines, but emerging economies face severe pressure. Consumers in developing regions are highly sensitive to retail price hikes, leading many to delay purchases or seek lower-cost alternatives.
Memory Crisis and Production Costs Driven by AI
The core driver behind the market slump is a massive surge in memory prices. According to diagnostics reported by diagnosa.id via CCS Insight, chip makers are heavily prioritizing high-performance server memory to feed the artificial intelligence boom, leaving DRAM and NAND supplies for mobile devices severely constrained. This shift has pushed memory components to account for a significant share of total production costs for certain phone models, according to CCS research analyst Ben Hatton. Consequently, entry-level smartphone prices have spiked compared to the previous year, threatening to push sub-$150 devices out of the market entirely, as noted by Counterpoint Research data.
Did you know?
Global smartphone prices jumped 13% between the first and second quarters of 2026 alone, with further increases expected in the second half of the year, according to FDM data.
Brand Divergence and the Resilience of Premium Segments
The crisis has impacted manufacturers unevenly. Counterpoint Research data cited by selfd.id shows projected shipment declines varying wildly among major brands, with Transsion facing a decline, Xiaomi down, Honor dropping, and Samsung sliding. In stark contrast, Apple’s premium segment has displayed strong resilience, posting record quarterly revenue driven by robust demand for the iPhone 17 series and stable chip supply chains.
Surge in the Secondary Smartphone Market
As new devices slip out of financial reach for many buyers, the secondary market is experiencing a significant lift. FDM reports that organized sales of used smartphones grew 3% year-on-year and are projected to surge by up to 9% by the end of 2026. Separately, diagnosa.id cites CCS Insight figures showing organized used phone sales growing 4% in the first quarter of 2026, with full-year growth potentially reaching 15%. Consumers are increasingly turning to refurbished and secondhand hardware to secure high-end specifications without paying new-device prices, though industry analysts warn that longer upgrade cycles—where users keep phones for over four years—may eventually constrain the supply of used devices.
Frequently Asked Questions
Why are smartphone prices rising in 2026?
Smartphone prices are rising due to a severe global shortage of memory components. Chip manufacturers have prioritized high-margin server memory for artificial intelligence infrastructure, driving up production costs for mobile OEMs.
How much are global smartphone shipments expected to drop?
FDM projects a global shipment contraction of up to 12% for 2026, while Counterpoint Research estimates a sharper decline, according to industry reports.
Are secondhand phones becoming more popular?
Yes. With new smartphone prices climbing, sales of used and refurbished devices are projected to grow between 9% and 15% in 2026 as consumers look for more affordable options.
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