The global smartphone industry rode a wave of recovery into late 2025, but a crippling memory shortage threatens to wipe out gains and more. Shipments are tipped to nosedive 12.4% in 2026, per Counterpoint Research, marking the sharpest drop on record.
Q4 2025 delivered 3.8% growth, capping four quarters of progress amid better economics and peak-season demand. It was the mightiest holiday quarter since 2021, thriving everywhere but China and Eastern Europe.
Enter 2026: memory deficits, surging part prices, and low-end OEM frailties spell disaster. The slump may persist through 2027, with supply normalization eyed for its second half.
‘Expect ripple effects into mid-2027; ramping memory takes quarters,’ notes Yang Wang, Counterpoint’s Principal Analyst. Budget phones, reliant on vanishing LPDDR4, face the worst. Companies are adapting via postponed releases, narrower offerings, spec tweaks, and price jumps—up to 20% for certain Android lines in early 2026.
Supply chains tell the tale: fabs favor profitable AI DRAM and NAND for enterprise SSDs over commoditized mobile chips. Premium players like Apple and Samsung stand tall, potentially gaining single-digit share through superior logistics and pricing. Entry-level (<$200) segment? A projected 20% bloodbath.
For stakeholders, this is a call to action. Diversifying suppliers and leaning into high-value products will be key to weathering the storm ahead.