Memory Crisis Triggers Biggest Smartphone Shipment Drop Ever

The global smartphone market is set for its largest ever year-over-year decline in 2026, with a projected 12.9% drop in shipments. This drastic fall is attributed to a severe memory chip shortage, exacerbated by AI giants stockpiling inventory for their data center projects. The ongoing memory crisis is expected to significantly alter the industry landscape.

This shortage has caused a dramatic surge in prices, particularly for RAM. Consequently, consumers can anticipate more expensive Android phones and a scarcity of budget-friendly options, which will likely dampen demand. IDC forecasts the average selling price for smartphones will jump 14% this year to a record $523.

Smaller smartphone vendors may face consolidation and sharp shipment decreases as they contend with supply constraints and reduced demand at higher price points. The impact will be more pronounced in regions like the Middle East and Africa, which are expected to see the steepest decline at 20.6%, and China, with a 10.5% projected decrease.

Leading manufacturers like Apple and Samsung might benefit by absorbing increased costs and expanding their market share, while smaller Android competitors struggle. A modest recovery is anticipated for 2027, with more substantial growth only expected in 2028 when memory supplies are projected to normalize. PC shipments are also forecast to decline significantly.