Smartphone Shipments Expected to Drop 12.3% in 2026 Amid Memory Shortages and Rising Prices

Global smartphone shipments are forecast to contract by 12.3% year-over-year in 2026, according to recent industry analyses, signaling the sharpest decline in the market’s history. This downturn follows a 6.1% drop in 2025 and reflects mounting pressure from persistent shortages in NAND flash memory, a critical component in high-capacity storage for modern devices. The scarcity has led to a 34% increase in memory module costs since early 2024, directly impacting production economics across the supply chain. The constrained availability of memory chips stems from delayed capacity expansions at key fabrication sites and reduced investment in next-generation manufacturing technologies. As a result, OEMs including Samsung, Apple, and Xiaomi have reported tighter production schedules and higher input costs, with some delaying new model launches until late 2026. The impact is most pronounced in mid-tier and budget smartphone segments, where price sensitivity has intensified amid inflationary pressures. Market research indicates that global smartphone shipments are expected to fall from 1.24 billion units in 2025 to 1.09 billion in 2026. The decline will be uneven across regions, with Southeast Asia and Latin America seeing the steepest drops—down 15.7% and 14.2%, respectively—while North America and Western Europe will experience more moderate declines of 8.9% and 9.3%. Consumer purchasing power remains under strain, with average selling prices rising to $427 in 2026 from $374 in 2023. The broader electronics ecosystem is affected, as memory shortages ripple into tablets, laptops, and IoT devices. Component suppliers are scaling back output, and several semiconductor firms have revised their 2026 revenue forecasts downward. This cycle may prolong until 2027, depending on capital investment and supply chain normalization.