Global Smartphone Shipments Hit 13-Year Low: How the AI Memory Crisis Is Reshaping the Industry

Global smartphone shipments fell 11% year-on-year in Q2 2026, the lowest for any second quarter since 2013, according to early estimates from Counterpoint Research . The root cause is a severe, supply-driven memory chip shortage. Explosive AI demand for DRAM and NAND flash chips has diverted manufacturing capacity away from mobile memory, causing shortages and record-high prices for smartphone makers . Unlike past downturns triggered by weak consumer demand, this is a supply-led crisis — the key constraint is that mobile LPDDR and NAND supply cannot keep up .

IDC described it as "a crisis like no other," forecasting the full-year market to contract 13.9% to about 1.09 billion units . A secondary factor is the US-Iran war, which adds macroeconomic uncertainty and further constrains growth .

How Different Manufacturers Are Affected

The impact is highly uneven. The market is polarizing, with premium players outperforming while budget-heavy brands get hit hardest.

Apple — bucked the trend with a 3% rise in Q2 2026 shipments, benefiting from strong demand for the iPhone 16 and 17 series and its premium customer base that is less price-sensitive .

Samsung — also outperformed the market and reclaimed the top spot by volume from Apple, according to Counterpoint . Samsung's integrated DRAM/NAND supply chain (via Samsung Semiconductor) gives it a cost advantage.

Transsion (Tecno, Infinix, Itel), Xiaomi, and Honor — face the steepest declines. These brands rely heavily on entry-level and sub-$150 devices, where the memory cost increase as a share of total bill of materials is highest, squeezing margins and forcing either price hikes or feature cuts . Some sub-$150 models are at risk of disappearing entirely .

Oppo and Vivo — are also seeing significant downward shipment revisions, though less severe than the budget-first brands .

Outlook for the Memory Chip Shortage and Smartphone Pricing

Shortage duration: Multiple research firms expect the memory crunch to persist well into 2027. IDC projects DRAM and NAND supply growth in 2026 will stay below historical norms — 16% and 17% year-on-year respectively — which is insufficient to meet demand . Counterpoint estimates the shortage could drag the industry down until late 2027 .

Smartphone pricing: Prices are rising sharply across the board.

• Gartner projects smartphone prices will increase by 13% in 2026 .
• TechWire Asia reports a 7% price increase specifically in the Asian market .
• The entry-level segment is under the most pressure, with some analysts warning sub-$150 smartphones may largely disappear .
• Average selling prices are hitting "unprecedented" levels as manufacturers pass through higher memory costs .

In summary, the market faces a supply-driven contraction lasting into 2027, with polarized effects: premium vendors like Apple and Samsung hold up relatively well, while budget-focused Chinese and African brands bear the brunt of rising memory costs and shrinking shipments.