Memory shortage causes record drop in global smartphone market
The global smartphone market in the third quarter of 2026 experienced the deepest drop in its history. Shipments of new devices fell by 22% compared to the same period last year - to 255.3 million units. The reason was a sharp rise in memory chip prices, forcing manufacturers to raise prices and abandon budget models.
Preliminary data from the analytical company IDC, released on October 15, Bloomberg reports.
Over the year, shipments decreased by 72 million smartphones: in Q3 2025, manufacturers shipped 327.3 million devices. The 22% decline was the largest annual decrease within a quarter in IDC's tracking history.
The main cause of the crisis, analysts say, is a shortage of RAM and flash memory. Chipmakers are redirecting capacity to meet demand from data centers for artificial intelligence. As a result, components for consumer electronics are becoming more expensive and less available.
IDC estimates that memory costs have risen about 350% over the past year. Although the pace of price increases is slowing, high prices continue to cut into smartphone manufacturers' profitability.
Companies are forced to pass on extra costs to buyers, reduce storage capacity in some models, and gradually wind down production of the cheapest devices. In response, consumers hold onto old phones longer and postpone new purchases.
Chinese manufacturers, which rely heavily on low-cost smartphone sales, suffered the biggest losses. Xiaomi shipments fell by 29.2%, OPPO by 34.5%, and vivo by 31.5%.
At the same time, Samsung and Apple proved more resilient thanks to a larger share of expensive devices in their lineups.
Samsung remained the largest smartphone maker with a market share of 22.6%. The company shipped 57.8 million devices, down 5.8% year-over-year. Apple ranked second with 57.3 million iPhones and a share of 22.4%. Its shipments declined only 4%.
Thus, although both companies sold fewer smartphones to distributors than a year earlier, their market shares increased amid a much deeper fall by competitors.
IDC does not expect a quick recovery of the global market. Analysts believe the negative trend will persist through 2027, with a return to growth possible no earlier than 2028.
At the same time, the decline in the number of devices sold does not necessarily mean a similar drop in the market's monetary value. Manufacturers are increasingly focusing on expensive smartphones, which allow them to offset some losses through higher prices.
IDC previously forecast that the average price of a new smartphone in 2026 would rise 27.6% to $581. This will hit budget phone buyers hardest, for whom price increases may make replacing a phone unaffordable.
Recall that in August, "Kurs Ukrainy" already reported on the decline in global smartphone shipments in the second quarter and the scaling back of low-cost model production. The new IDC data indicates a further deepening of the crisis.