The global smartphone market experienced a sharp downturn in the second quarter of 2026, with shipments declining 11% year-over-year (YoY) to reach their lowest Q2 levels since 2013.
According to preliminary estimates from Counterpoint Research’s Market Monitor, a worsening global memory shortage has overtaken all other market factors to emerge as the dominant drag on the industry.
The steep decline in shipments is directly tied to soaring component costs. DRAM and NAND flash memory prices increased significantly throughout the quarter as memory suppliers prioritized high-margin demand from artificial intelligence (AI) data centers over consumer electronics.
This supply shift forced Original Equipment Manufacturers (OEMs) to pass rising Bill of Materials (BOM) costs onto consumers through repeated retail price hikes, hit hardest in the highly competitive entry- and mid-tier segments.
“The global memory crisis has now overtaken every other factor as the single biggest drag on the smartphone industry. What started as components issue last year is now a full-blown demand issue. The entry and mid-tier devices, which account for a majority of the world’s smartphone volumes and are the most exposed to BOM economics, become structurally unfeasible at previous price points,” said Shilpi Jain, Senior Analyst at Counterpoint Research.
Jain noted that brands are reacting in wildly different ways. Some are absorbing margin pressure and hiking prices, others are extending the lifecycles of older-generation devices to appease budget-conscious buyers, while some have simply scaled back on production and new launches.
Compounding the crisis, geopolitical tensions in the Middle East have driven up oil and shipping costs. This supply-chain inflation has collided with a broader macroeconomic squeeze, slower global growth, and record-low consumer sentiment.
Despite the industry-wide headwind, some brands managed to find pockets of resilience, particularly in the premium segments.
Samsung secured the No. 1 global position with a 24% market share, posting the strongest growth among the top five players. The South Korean tech giant benefited from superior vertical integration, better product availability, and fewer price hikes.
Its premium Galaxy S26 series, led by the high-end Ultra variant, saw a strong sales ramp-up, propelled by consumer interest in its advanced AI capabilities and specialized privacy display. Aggressive summer promotions also helped Samsung hold steady in pivotal markets like India and the Middle East.
Apple captured a record 20% market share on the back of a 3% YoY shipment increase. Crucially, Cupertino was the only major manufacturer to completely avoid raising smartphone prices during the quarter.
While the iPhone 17 series remained the top-shipped global model, Apple faced a softer landscape in China, where its early promotional discounts ahead of the “618” shopping festival were less aggressive than those offered in 2025. Legacy iPhone models also saw lower priority as Apple channeled tight memory allocations toward current-generation devices.
While the market leaders felt the heat, Google and Huawei booked impressive growth. Google’s shipments jumped 16% YoY, driven by robust sales of the Pixel 10 and Pixel 10a in mature markets. Meanwhile, Huawei recorded a 6% YoY increase, sustained by resilient domestic demand for its Mate 80 series, Nova 15, and the newly launched Enjoy 90 series.
The road ahead remains rocky. Counterpoint Research expects global smartphone shipments to continue to decline substantially through the rest of 2026, warning that the global memory shortage will likely persist well into 2027.
As a result, manufacturers are expected to prioritize value over sheer volume. Consumers should brace for fewer low-margin budget options, adjusted configuration tiers (such as lower base storage options), and a heavier retail push toward refurbished and previous-generation hardware.
While premium devices will continue to be bolstered by flexible financing, ecosystem lock-in, and AI features, a broader global smartphone market recovery is firmly on hold until the memory supply chain stabilizes.