Global Smartphone Market Set for Historic Decline in 2026 – Here’s Why

The global smartphone market may be heading toward its worst decline in decades. According to a recent report from International Data Corporation (IDC), worldwide smartphone shipments are expected to fall sharply in 2026. The projected decline could mark the steepest drop the market has seen in years, even worse than the slowdown during the COVID-19 period.

IDC estimates that around 1.1 billion smartphones will ship in 2026. That figure represents a decline of nearly 13% compared to 2025. After a period of steady recovery following the pandemic, this sudden reversal signals deep structural pressure on the industry. The main reason behind this slump is a severe shortage of memory components, specifically DRAM and NAND flash storage.

Global Smartphone Market Set for Historic Decline in 2026 – Here’s Why

Memory chips are essential parts of every smartphone. DRAM handles multitasking and app performance, while NAND stores data such as photos, apps, and system files. Over the past year, supplies of both components have tightened significantly. As a result, manufacturers are paying much higher prices for these parts, and those costs are now being passed on to consumers.

The impact is already visible. Samsung recently launched its Galaxy S26 series at prices $100 higher than the previous generation, despite offering only modest hardware improvements. This pricing trend is likely to continue across the industry as brands adjust to rising component costs.

IDC also predicts that the average selling price of smartphones will increase by 14% in 2026, reaching a record $523. For consumers, this means fewer budget-friendly options and higher entry points for new devices. The low-end market is expected to suffer the most. In 2025, around 170 million smartphones priced under $100 were shipped globally. However, with memory prices surging, manufacturers may find it financially unsustainable to continue producing ultra-affordable devices.

Industry analysts believe that the era of extremely cheap smartphones may be coming to an end. Even if memory prices eventually stabilize, they are unlikely to return to previous lows. That means the cost structure for entry-level devices could permanently shift upward.

Interestingly, not all companies will be affected equally. Large brands such as Apple and Samsung are better positioned to absorb higher costs due to their strong supply chains and premium pricing strategies. They may even gain market share as smaller brands struggle to maintain margins. In contrast, companies that rely heavily on low- and mid-range devices face greater risk because their profit margins are already thin.

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A major driver of this supply crunch is the rapid expansion of artificial intelligence infrastructure. Technology companies are building massive AI data centers that require enormous quantities of high-performance DRAM and NAND storage. This surge in demand is consuming much of the global supply, leaving fewer components available for consumer electronics like smartphones.

There is some hope for recovery. IDC expects memory prices to stabilize by mid-2027, which could allow smartphone shipments to grow slightly again. A stronger rebound may follow in 2028, with moderate annual growth returning to the market.

For now, however, the outlook remains challenging. Higher prices, shrinking shipments, and pressure on budget devices suggest that 2026 could be remembered as one of the toughest years the smartphone industry has faced in decades.