Global smartphone shipments hit the lowest mark since 2012 in the third quarter of 2026 as a memory shortage squeezed manufacturers, according to an analysis published by Counterpoint Research.
Memory Shortage Triggers Global Price Hikes
The cost of DRAM and NAND memory chips continues to climb because artificial intelligence infrastructure projects are absorbing more than 70% of global production, TrendForce reported. Research firm Gartner estimated that companies will spend $1.4 trillion on AI infrastructure this year alone. Shilpi Jain, a senior analyst at Counterpoint, stated that the industry is taking the full brunt of the memory crisis for the second consecutive quarter. Smartphone memory prices jumped more than 80% quarter-on-quarter in the second period of 2026, with DRAM becoming the single most expensive component in flagship phones, according to Counterpoint data cited by China Daily.
Higher component costs have forced major manufacturers to adjust retail pricing. Meanwhile, Chinese brand iQOO unveiled its self-developed Q4 gaming chip alongside the iQOO 16 gaming phone to compete on gaming performance rather than price alone, as reported by China Daily.
Market Share Shifts Amid Slumping Volumes
Samsung captured 23% of the global market in the third quarter, up from 19% in 2025, supported by strong initial demand for the Galaxy Fold 8, Counterpoint Research reported. Android Authority noted that Samsung widened the gap with Android competitors, while Xiaomi’s market share dropped from 14% to 10%, Oppo’s fell from 12% to 9%, and Vivo’s declined from 9% to 8%. Apple secured 22% of the market in the third quarter, surpassing 20% for the period for the first time, though both Apple and Samsung experienced year-over-year shipment declines.
Consumers are responding to the price spikes by delaying upgrades. TMT analyst Paolo Pescatore told CNET via email that shoppers find steep price premiums hard to justify when existing devices meet everyday needs. A Counterpoint survey across the US, UK, India, China, and Germany showed that half of respondents plan to wait for holiday sales to buy a new phone, with the figure rising to 56% among Gen Z consumers. In India, Counterpoint’s research director Tarun Pathak noted that the festive market will see a 12% volume decline, driven primarily by replacement cycles rather than first-time buyers, as reported by The Times of India.
Financing and Trade-In Programs Boost Upgrades
Phonemakers and carriers are relying on alternative strategies to move inventory as device prices remain elevated. Pescatore noted that brands may increasingly promote refurbished handsets, repairs, and trade-in schemes, while carriers like T-Mobile, Verizon Wireless, and AT&T use financing plans to entice buyers. Sreevathsa Prabhakar, founder and CEO of device trade-in platform Servify, told The Times of India that trade-in volumes in October and November typically run 50% higher than in regular months, helping consumers bridge the gap on smartphones priced above 100,000 rupees.
Counterpoint Research indicated that as AI investments continue to consume memory supply, phone prices will not fall in the near term. Manufacturers are concentrating resources on premium devices, which may result in fewer budget alternatives for customers. Counterpoint’s Jain observed that this dynamic widens the gap between premium and price-sensitive segments, forcing budget-conscious shoppers to prioritize refurbished units and higher-value trade-ins.
Shipments Plunge Amid Memory Chip Shortage
- How much did smartphone shipments decline in the third quarter of 2026?
- Global smartphone shipments dropped 20% year-over-year in the third quarter, hitting the lowest mark since 2012, according to Counterpoint Research.
- What caused the memory chip shortage affecting smartphone manufacturing?
- The shortage stems from massive AI infrastructure investments, with Gartner estimating companies will spend $1.4 trillion on AI this year and TrendForce reporting that over 70% of global memory chip production goes toward AI investment.
- How did the major manufacturers perform in market share during the third quarter?
- Samsung led with 23% of the market due to strong demand for the Galaxy Fold 8, while Apple reached 22% market share, according to Counterpoint Research figures reported by Android Authority.
- What price increases have consumers faced on new smartphone releases?
- Samsung increased prices by $100 on Galaxy S26 phones, and Apple priced its new iPhone 18 Pro and Pro Max models $100 higher than the previous generation, alongside the introduction of the $1,999 iPhone Duo.