Global smartphone shipments are expected to drop 2.1% in 2026 as high component prices squeeze margins, particularly for low-end devices, according to Counterpoint Research.
The decline is a 2.6-percentage-point revision from earlier forecasts, with Chinese brands like Honor, Oppo, and vivo facing the biggest setbacks.
“What we are seeing now is the low end of the market (below $200) being impacted most severely, with bill-of-materials costs increasing by 20%-30% since the beginning of the year,” said MS Hwang, research director at Counterpoint.
Mid- and high-end models are not left out in the global smartphone shipments statistics for 2026, seeing cost jumps between 10% and 15%.
The crunch is being driven by a global shortage of legacy memory chips, as manufacturers change production to high-end semiconductors designed for artificial intelligence servers.
Nvidia’s move to adopt smartphone-style memory chips in AI servers is expected to double server-memory prices by late 2026, creating sudden demand the industry cannot easily meet.
Yang Wang, senior analyst at Counterpoint, added: “Apple and Samsung are best positioned to weather the next few quarters. But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins. We will see this play out especially with the Chinese OEMs as the year progresses.”
OEMs are already responding with portfolio adjustments. Some low-end models are being stripped of features like periscope camera modules, high-end displays, and audio components.
Others are pushing consumers toward higher-spec ‘Pro’ variants or streamlining product lines to mitigate cost pressures. Shenghao Bai, another senior analyst, noted: “Other tactics include reusing old components, streamlining the portfolio, and pushing consumers to higher-specification ‘Pro’ variants and adopting new designs to stimulate upgrades.”
As a result of cost pass-through and strategic portfolio changes, average selling prices are projected to rise by 6.9% in 2026, an increase from the 3.9% forecasted in September.
The low-end segment is expected to be the hardest hit, with price hikes potentially pricing out some consumers entirely.
