Manufacturers continue to divert the wafer capacity toward higher‑margin AI‑focused DRAM needs such as those in data centres, and this leaves smartphone OEMs with limited visibility
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GORODENKOFF
Global smartphone shipments are forecast to fall 12 per cent y-o-y in 2026, dropping just below 1.1 billion units, the lowest annual volume since 2013, when the global 4G transition was still on, research firm Counterpoint said in an analysis on Friday.
A severe memory crunch, coupled with elongated replacement cycles in absence of large specification changes are set to be the primary trigger of the downturn, which is anticipated to extend into 2027.
“Premium segments will remain comparatively resilient, while lower segments will face the sharpest margin and affordability pressures due to shrinking LPDDR4 supply and rising component costs. As a result, OEMs focused on lower segments and emerging markets will take the biggest hit,” Counterpoint said .
long term delays
Counterpoint Principal Analyst Yang Wang said, ”The impact is expected to continue through H2 2027, as it will take several quarters for memory supply expansion to materialise. Lower-end smartphones are likely to be affected the most, especially as LPDDR4 supply is shrinking faster than expected. OEMs are already responding with launch delays, streamlined portfolios and specification trade-offs. We have also observed 10-20 per cent price increases across some Android OEM portfolios in January 2026.”
“Apple and Samsung are likely to weather the headwinds better due to stronger supply chain integration, higher pricing power, and continued premiumisation,” Counterpoint said. We also expect the second-hand smartphone market to grow in 2026 as some of these offerings in the sub $300 segment will look more attractive to budget-conscious buyers, the report added.
Speaking to businessline about the scenario in Indian smartphone market, Counterpoint senior analyst Prachir Singh said that there is set to be a 5-10 per cent shipment decline in India due to the memory crunch. OEMs are either passing on the higher memory prices to consumers or in some instances there is a sort of “Shrinkflation” with trade off of specs in subsequent models, he said. The memory crunch is fundamentally supply‑side in nature, and recovery will depend on the pace of new memory capacity coming online, he added.
Manufacturers continue to divert the wafer capacity toward higher‑margin AI‑focused DRAM needs such as those in data centres, and this leaves smartphone OEMs with limited visibility. Mobile LPDDR4/5 prices in Q2 2026 are expected to reach nearly three times the levels seen in Q3 2025, reflecting an unprecedented squeeze in supply.
Published on February 27, 2026
