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Smartphone Shipments Plummet Amid Chip Shortage
4 Jun
Summary
- Global smartphone shipments expected to fall 13.9% in 2026.
- Budget smartphone segment hit hardest by chip supply issues.
- Premium brands like Apple show resilience in the market.
The global smartphone market is poised for its most significant annual contraction, with projections indicating a 13.9% slump in shipments for 2026, totaling 1.08 billion units. This revised forecast, down from earlier expectations, is primarily driven by an intensifying shortage of memory chips, a situation exacerbated by geopolitical factors.
The lower-end segment of the smartphone market is experiencing the most acute effects. Chip manufacturers are reallocating production capacity towards AI-related chips, diminishing the economic viability of producing entry-level devices. Consequently, wholesale prices for smartphones increased by 14% in the first quarter of 2026, while shipments declined by 3.1% year-on-year. Models priced below $150 are particularly vulnerable and may cease to be available.
In contrast, the premium segment of the market remains more robust. Leading players like Apple have reported strong revenues, supported by customer upgrades to newer models. Apple's shipments are expected to remain stable before a projected 5% increase next year. Samsung Electronics has also maintained steady volumes and is anticipated to experience only a modest 4% decline in shipments for the full year, outperforming the broader market due to stable supply chains and consistent product offerings.
