Smartphone sales to take it on the chin this year
Higher prices due to smartphone memory chip shortage will hurt global handset shipments this year.
Global phone shipments to see double-digit decline in 2026 | Image by PhoneArena
According to market research firm Omdia, the global smartphone market is in the midst of a very difficult year. Omdia expects smartphone shipments worldwide to decline 12% year-over-year as consumers move their focus from less expensive entry-level handsets to more expensive models. Not only that, but consumers are holding on longer to the phones they own leading to the forecast reduction in smartphone shipments this year.
Smartphone owners are keeping their devices longer
One reason why smartphone owners are holding on to their phones longer before upgrading is that companies like Samsung and Google now offer as many as seven years of Android OS updates. Apple gives its iPhone models five to seven years of iOS updates.
12% fewer handsets will be shipped worldwide in 2026
Omdia says that 1.097 billion smartphones will be delivered in 2026. While that will be a 12% decline from the 1.25 billion smartphones shipped globally last year, higher smartphone prices mean that the average price for each phone sold will rise to $594. As a result, the total market value of the smartphones shipped this year is expected to rise 12% to $651.6 billion.
Percentage change of global smartphone shipments in certain price tiers over three years. | Image by Omdia
What is causing the memory chip shortage
A shortage of DRAM memory chips for smartphones is forcing phone manufacturers to raise prices and/or reduce the amount of RAM in new models. Memory purveyors such as Samsung, SK Hynix, and Micron have had to decide whether to use their limited assets to produce DRAM chips for smartphones, or build higher-margin HBM (High Bandwidth Memory) chips for AI accelerators.
Since the HBM chips deliver higher profit compared to DRAM, it is no surprise that Samsung, SK Hynik, and Micron are choosing to make more HBM chips at the expense of DRAM chips.
Fewer handsets priced at $200 will be shipped globally this year
In 2025, 40.6% of the smartphones shipped worldwide were priced below $200. By next year, that percentage is expected to decline to 25.6%. As consumers are choosing to buy fewer phones priced at $200 or less, the percentage of phones shipped with a price tag of approximately $800 will rise to 28.4% next year from 21.1% at the end of 2025.
As with any type of forecast, we will have to wait and see how close Omdia gets to the actual numbers when they are reported.
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