Counterpoint expects global smartphone shipments to decline by roughly 14 percent this year and believes the memory shortage will continue into 2027.
As an AI-driven memory chip shortage continues to push handset prices higher, according to figures from Counterpoint Research, the biggest slowdown came in China, where three of the country's five largest smartphone manufacturers recorded shipment declines. This extends a five-quarter slump for the world's largest smartphone market, much of which stems from the global race to build artificial intelligence infrastructure.
Reuters reported that memory manufacturers have increasingly prioritized supplying high-margin AI data center customers over consumer electronics companies, driving up the cost of DRAM and NAND memory used in smartphones and forcing manufacturers to either raise prices or absorb the additional expense.
Budget devices have been hit hardest. According to research from market intelligence firm Omdia, smartphones priced below $400 are expected to see shipments fall by more than 22 percent this year. The report found memory now accounts for as much as 60 percent of the manufacturing cost of phones under $400 and more than 64 percent for ultra-budget devices priced below $99.
Tom's Hardware noted that 32GB DRAM kits which sold for roughly $100 last October have surged to around $350 "if even in stock". Not every manufacturer suffered equally, however. Apple increased shipments by 3 percent during the quarter, capturing a record 20 percent global market share, while Samsung reclaimed the industry's top position with a 24 percent share after strong Galaxy S26 sales. Chinese firms Xiaomi, Oppo and Vivo posted the steepest declines among the world's five biggest smartphone makers because of their greater exposure to the entry-level and mid-range market, where higher memory costs are hardest to absorb.
Counterpoint expects global smartphone shipments to decline by roughly 14 percent this year and believes the memory shortage will continue into 2027. Smartphone mogul Kwak Noh-jung has warned the shortage could become even more severe next year.
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